Unclaimed Dividends and Performance of the Fixed Income Market in Nigeria

Abstract

This study investigated the effects of unclaimed dividends on the performance of the fixed income market in Nigeria from 1991 to 2021, with the specific objectives of determining the extent to which unclaimed dividends of less than 15 months, unclaimed dividends with registrars and unclaimed dividends with companies have affected market capitalization of the fixed income market in Nigeria. The study utilized 31 years annual time series data obtained from CBN and SEC statistical bulletins for 2021. Johansen co-integration, ECM estimation and granger causality techniques were used to ascertain the short and long run relationship among these variables. Results indicated that a long run relationship exist between unclaimed dividends and performance of the fixed income market, while the speed of adjustment in event of any distortion is about 62.5%. It was also revealed that only unclaimed dividends with companies have a positive effect on market capitalization of the fixed income market; while unclaimed dividends of less than 15 months, unclaimed dividends with registrars and unclaimed dividends with Companies have a joint significant effect of about 80% on market capitalization of the fixed income market. It was as such deduced that unclaimed dividends has a long run significant effect on the performance of the fixed income market in Nigeria. The study therefore suggested that there is need for sincerity on the part of the government, SEC and registered companies to reduce the volume of unclaimed dividends in Nigeria; as this will go a long way in boosting the performance of the Nigerian capital market.