THE EFFECT OF GOVERNMENT BOND ATTRIBUTES ON CAPITAL MARKET PERFORMANCE IN NIGERIA

Abstract

The study examined the impact of government bonds on capital market performance in Nigeria, Specifically, this study investigated the volatility level of government bonds in the Nigeria capital markets, the impact of government bonds markets capitalization on capital market performance. Ten-year Time-series data was used for this study from 2014 to 2023 sourced from the Central Bank of Nigeria (CBN), Nigerian Exchange and Securities and Exchange Commission (SEC). Data was subjected to linear regression analysis which was used to estimate the parameters of the model. The findings revealed that Government bond market capitalization, value of government bond and new issues of government bonds all have a significant positive effect on capital market performance in Nigeria. While, volatility level of government bonds hurts capital market performance. Based on the findings the study concluded that government bonds capitalization, the volume of government bonds, and new issues on government bonds should be increased, while volatility in the value of government bonds should be reduced. The study therefore recommended that the government should increase its bond market capitalization to increase the capital market performance; the government through its agency should attempt to prevent the bond price and return fluctuation and the government should increase the number of bond issuance in circulation to increase the level of capital market performance in the country.