Company fundamentals and stock price movements: The role of crude oil prices – Evidence from Nigerian Stock Exchange (NSE)

Abstract

This study analyzed company fundamentals on how it relates and predict stock price movements and the extent of the role of oil prices in moderating the influence of these company fundamentals in stock price movements. The study covered the period of 2014 to 2018. The study is a panel study. A total of 132 companies were sampled from 196 companies listed on the Nigerian Stock Exchange (NSE) as of December 2018. Data were collected from a secondary source. Multiple linear regression models were used to analyze the data. The study found that a relationship exists between selected companies' fundamentals and stock prices, and oil prices moderate the relationship. But EPS and Working Capital have high predictive power on stock price movements but moderating with oil prices the influence reduces significantly. The study recommends among others that Managers of companies in Nigeria should formulate policies and exert effort geared towards improving company fundamentals in the event of oil prices increases.