Does global monetary policy uncertainty matter for stock market returns? The evidence of quantile regression for Africa

Damilola Arawomo (), Richard Umeokwobi () and Emmanuel Ohaegbu ()
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Damilola Arawomo: Central Bank of Nigeria
Richard Umeokwobi: Central Bank of Nigeria
Emmanuel Ohaegbu: Central Bank of Nigeria

Economics Bulletin, 2025, vol. 45, issue 1, 210 - 229

Abstract: This study explores the impact of monetary policy uncertainty on stock returns in seven major African stock markets: South Africa, Egypt, Nigeria, Ghana, Kenya, Mauritius, and BRVM, using quantile regression and monthly data from August 2017 to August 2022. The results show that monetary policy uncertainty positively affects stock returns in South Africa and Egypt, positioning them as safe havens. Conversely, it negatively impacts stock returns in Nigeria, Ghana, Kenya, and Mauritius. Oil prices positively influence returns in Nigeria and Mauritius, while exchange rate appreciation boosts Nigerian stock returns. Corruption has a negligible effect on stock returns. The findings emphasize the importance of stable policies, financial resilience, and improved governance for fostering investor confidence and enhancing market performance in Africa.

Keywords: Keywords: Uncertainty; Monetary; Stock return; Africa (search for similar items in EconPapers)
JEL-codes: E4 E5 (search for similar items in EconPapers)
Date: 2025-03-30
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