Proceedings of 20th International Business Research Conference
4 - 5 April 2013, Dubai, UAE, ISBN: 978-1-922069-22-1
Behaviour of Real Estate Stocks: Empirical Evidence from
the Nigerian Capital Market
Dr. Dauda Omoyi Abdulsalam and Mr. Stephen O. Aro-Gordon
This paper provides empirical evidence of the unique investment
attributes of real estate stocks in the context of Nigeria. The paper
contributes to portfolio management and has important implications for
practitioners. Empirical analysis was based on published data on the
stock prices of UACN Property Development Company Plc (UPDC) (a
leader in the country’s real estate sub-sector) as well as from the
Nigerian Stock Exchange over 14 trading years spanning 1998-2011,
taking into consideration variables specified by Capital Asset Pricing
Model. Relying on the results of Correlation and Regression analyses,
the empirical evidence indicated that the market risk of UPDC stock was
significantly low, while outperforming the general market, thus providing
veritable risk-diversification benefits to investors and portfolio managers.
The recommendations proffered include the need for the Nigerian
Sovereign Investment Authority (NSIA) to ensure that a sizable portion of
the new $1 billion Sovereign Wealth Fund is invested in real estatebacked financial instruments in order to achieve the much-desired
financial stability and enhancement of infrastructure development in the
country.
KeyTerms: Finance, Capital Market, Capital Asset Pricing Model, Stock Misbehaviour,
Real Estate, Market Risk, Market Portfolio.
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Dr. Dauda Omoyi Abdulsalam, Department of Business Administration, Usmanu Danfodiyo University,
P. M. B 2346, Sokoto, Nigeria. Ph: +2348035073549, E-mail: daomoyi@yahoo.co.uk
Mr. Stephen O. Aro-Gordon, Department of Business Administration, Usmanu Danfodiyo University,
P. M. B 2346, Sokoto, Nigeria. Ph: +2348037389550, E-mail: getyouthsworking@yahoo.com