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- ItemApplication of technical analysis in trading forex; comparison of trend indicators vs oscillators(Strathmore University, 2017) Amunga, Jeff Chibole;This paper tests the hypothesis that in the long term, the use of technical analysis can produce positive returns. It particularly looks at the use of two of the most commonly used types of technical analysis which are momentum based indicators and oscillators. In order to assess the performance of this types of technical analysis, two popular momentum based indicators are chosen, namely Moving Average and Bollinger bands, while two popular oscillators are chosen namely, Relative Strength Index and Moving Average Convergence common. To gauge the performance of the indicators, the parameters of each of the indictors is subjected to six most traded currency pairs which were USDJY, EURUSD, USDCAD, GBPUSD, USDCHF and AUDUSD. The daily closing prices of each of the currency pairs are used, and based on the parameters of the individual indicator, a buy or sell signal is conveyed by the indicator, and the profit or loss, of each of the signals is measured and summed up so that comparison of performance is possible. Daily closing prices from 2000-2015 are used. The findings suggest it is possible for technical analysis tools to make positive returns over the long term. It also suggests that momentum indicators are better than oscillators and that Bolliriger bands are the best of the four indicators measured in this paper:
- ItemValuing the stock price of the industrial companies listed on the Nairobi Securities Exchange using the Residual Income Model(Strathmore University, 2017) Wanjohi, Luke Wang'ombeThe cross-sectional variation in stock returns due to the earnings announcement has gathered extensive research (Dimitropoulos & Asteriou, 2009) (Ball & Shivakumar, 2008) (Cohen, Dey, Lys, & Sunder, 2005) (Skinner & Sloan, 2002) (Beaver, 1968) as it is the primary mechanism through which public companies provide periodic financial performance updates to investors. Although earnings are one important determinant of stock prices, there are other accounting determinants, including balance sheet values (Dechow & Sloan, 2014). The balance sheet is an important source of information as it lists the assets (future economic benefits) and liabilities (future economic obligations) of the company. Lf the accounting process successfully identified all such benefits and obligations and valued them at their fair values, then the balance sheet itself would be sufficient for determining company value. The balance sheet, however, relies on amortized historical costs for many assets (e.g., property, plant and equipment) and ignores other assets altogether (e.g., internally generated intangibles). As a result, early research (Kormendi & Lipe , 1987) assumed that the balance sheet would be less relevant than the income statement for valuation (Dechow & Sloan, 2014).
- ItemThe effect of non-performing loans on the financial performance of commercial banks in Kenya(Strathmore University, 2017) Mitai, Achieng AnnetteThis study was carried out with objective of finding out whether the commercial banks in Kenya have been impacted by the problem of non-performing loans and whether ownership has any influence on the impact of non-performing 10ans. A Profitability measured by return on asset is used as dependent variable and non-performing loans measured by non-performing loans ratio, capital adequacy, management efficiency and liquidity are used as independent variables. The independent variables used of CAMEL factors that also affect profitability of commercial banks. To improve the accuracy and reliability of the test Wank size is used as a control variable and ownership as a dummy variable. The ownership structure used in this study whether a commercial bank is government owned that is the government has a significant stake in the bank or whether it is publicly owned. The research covered the commercial banks in Kenya listed in the Nairobi securities exchange for the past five years 2009-2014. The study used secondary data to analyze and draw conclusions and recommendations. A fixed effects model was used. The study indicates that there is negative effect of non-performing loans ratio on return on assets, confirming that non-performing loans negatively affects profitability of commercial banks in Kenya. On top of that the ownership structure was found to influence the impact of non- performing loans.
- ItemSustainability of an electronic waste recycling plant in Kenya(Strathmore University, 2017) Maranya, Lester OntegiThe rise of technological innovation has brought with it an increase of electronic waste which causes environmental and health problems. This paper highlights the informal electronic waste recycling practices mostly used in developing nations and the dangers that come with it. The paper first investigates the amount of mobile phone electronic waste generated in Kenya annually. This is done through a questionnaire to find out the rate at which people change their mobile phones. It then seeks to investigate the sustainability of an electronic waste recycling plant in Kenya by modelling costs and revenues of such a plant over time as to whether such a plant can be self-sufficient. In order to test sustainability of the plant, an excel model is developed comprising of three major components; collection, recycling and refurbishment with relevant costs and revenues stated at each stage. This research will provide a foundation for establishment of an electronic waste recycling facility.
- ItemImpact of layoff announcements on stock performance of firms listed on the Nairobi securities exchange.(Strathmore University, 2017) Birech, Joyce JelimoDespite vast research on the impact of layoff announcements on stock price performance in developed markets, little is known of the same with regard to the Kenyan market. To this end, this study sought to determine the strength and nature of the relationship between layoff announcements and stock price performance for firms listed on the NSE. The study also set out to investigate the nature of the relationship between the reason for the layoff, as provided by management, and stock price reaction. To conduct the research, a sample often firms that had made layoff announcements over the period spanning 2011-2016 were studied so as to check whether there were any abnormal returns observed during the period surrounding the layoff announcement. To facilitate this, an event study methodology was used with an estimation period of 120 days and a 21-day event window. The findings of the study reveal that there exists no statistically significant relationship between layoff announcements and stock price reaction. However, the reason guiding the layoff decision has an impact on stock price movement. For layoffs that are proactive in nature, stock prices react positively but in cases where the layoff is reactive in nature, there is no impact on the stock price reaction.