Abstract
This study aims at quantifying fundamental components such as the country economy, stock market development, economic sectors, and company’s performance computed by Data Envelopment Analysis (DEA) built-in MATLAB program and combined using a top-down approach. It was conducted in the East African region specifically Kenya, Tanzania, Uganda, and Rwanda from 2015 to 2018. A secondary data extracted from the listed company’s websites, capital market authorities of each country, and World Bank. The study found that the combined performance of various components has a great impact on screening the stocks to be used for portfolio construction. It gives a signal to the authorities of capital markets, investors, policymakers, and other regulatory bodies to take immediate measures on designing policies and best practices. Further recommendation to the capital market authorities within the region is to ensure the growth of managerial and operational performance of stock exchanges. Also, regulatory bodies, policymakers, and higher-level administration of each country within the region to take responsibility to uplift the country's economy as well as economic sectors growth. The board of directors and management of listed companies should formulate strategies to improve both managerial and operational performance.
Highlights
The market of securities, as the one of the main components of financial market performs an allocation functions between the investors, who are willing and able to invest monetary funds in order to get the growth of profit, interests and capital and issuers, who are trying to attract capital for development, modernization or achievement of other goals by distributing their share and bonds.The market of the securities formed in Lithuania quite recently, only in 1993, when the National Securities Exchange was founded
I.e. examining everything what is behind the limits of securities market in order to determine the share market prices and fundamental indicators which influence them over the long term, firstly, the most suitable country is selected, the effectively operating industry branch and the effectiveness indicators of company activity are analyzed
Both the country’s and global economic state is very important for the investor, who plans the expected investment profitability and money flows
Summary
The market of securities, as the one of the main components of financial market performs an allocation functions between the investors, who are willing and able to invest monetary funds in order to get the growth of profit, interests and capital and issuers, who are trying to attract capital for development, modernization or achievement of other goals by distributing their share and bonds.The market of the securities formed in Lithuania quite recently, only in 1993, when the National Securities Exchange was founded. Most of the economic entities for a long time were choosing the conservative investment solutions: securities of the government, savings bonds or bank deposits. Such investments do not longer meet the expectations of investors as interest rates in Lithuania as well as Europe are at record lows. Such an investment environment, especially relevant today, makes the professional and non-professional investors, seeking for higher returns, to look back at the securities market. In order not to put a foot wrong and properly select the investment direction it is necessary to have adequate knowledge about the shares, which will help to accurately evaluate the prices of the securities and reduce the rising risks
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