Journal Articles

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Author: search.filters.author.Njogo, MichaelHas files: Yes

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    Youth Engagement with Co-operatives in Kenya
    (ResearchGate, 2016) Mwangi, Renson M.; Maina, Rosemary; Kairo, David; Simiyu, Christine N.; Njogo, Michael
    Dynamism, innovation, entrepreneurship, adaptability, continuity and renewal; words that are benignly associated with youth. But the youth face daunting challenges that inhibit realization of this potential; unemployment, ostracization, inexperience, self-destruction through substance abuse among others. Moreover, in spite of the enumerated potential of the youth, their engagement and participation in Kenyan co-operative societies is largely undocumented and less is known about their involvement with, as well as their attitudes and behaviors towards co operatives. How much knowledge about co-operatives do the youth possess? What is their level of awareness about the potential positive impact of co-operatives on their welfare? What impediments do they encounter when joining co-operatives? Relying on survey data collected from nine (9) Counties in Kenya, and focus group discussions held in five major towns, this research sought to examine and gain valuable insights into the perceptions, behavior and attitudes of the Kenyan youth toward co-operatives. While most of the youth were found to be cognizant of the existence of co-operatives, knew people who have benefitted from them, and perceive co-operatives to be important vehicles for accessing credit and accumulating saving, paradoxically many of them did not belong to co-operative. These findings have important implications on how co-operatives can engage the youth: a) Educate them on the importance of saving for the future and encourage them to engage in income-generating activities. b) Co operatives should strive to ingratiate themselves with the youth by developing products that resonate with them. c) When reaching out, adoption of communication technologies that appeal to the youth is crucially essential. d) Co-operatives should make themselves more accessible to the youth by flexing membership rules and savings plans. e) Learning institutions – schools, colleges and universities – should consider incorporating co-operative studies in their curricula to enlighten young people on the co-operative model. f) Co-operatives should also consider developing mentorship programs to mainstream the youth into leadership.
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    Effect Of Budgeting Practices On The Financial Performance Of Insurance Companies In Kenya
    (International Journal of Economics, 2017) Njogo, Michael; Ngumi, Daniel K
    Purpose: The general objective of this study was to establish the impact of budgeting practices on financial performance of insurance companies in Kenya. Methodology: The study applied descriptive research design. The population of the study comprised the 45 insurance and reinsurers companies that are were registered by the year 2010.The target sample was 50% of the population. A sample size of 50% is adequate for a descriptive study which has a small population. This implied that the sample was 23 insurance companies. Convenient sampling was used to obtain the 23 insurance companies. The study used secondary data collected from the Insurance Regulatory Authority, Association of Kenya Insurers and the respective insurance and reinsurers companies. The study used Statistical Package for Social Sciences (SPSS Version 17.0) and Stata version 13 to analyze the panel data. Descriptive statistics such as, mean and frequencies and inferential statistics (regression and correlation analysis) were used to perform data analysis. Results: The study found out that CAPEX variance and performance (ROI) are negatively and significant related (r=-0.1611, p=0.000), OPEX variance and performance (ROI) are negatively and significant related (r=-0.1267, p=0.000), human resource variance and performance (ROI) were negatively and significantly related (r=-0.1129, p=0.000) while income variance and performance (ROI) were also positively and significantly related (r=0.2136, p=0.000). From the findings, the study concluded that CAPEX variance has a negative and significant effect on performance (ROI). The study also concluded that OPEX variance has a negative and significant effect on performance (ROI). In addition, the study concluded that human resource variance has a negative and significant effect on performance (ROI) and lastly, the study concluded that income variance has a positive and significant effect on performance (ROI). Policy recommendation: Study recommended that insurance companies should focus on minimizing the variances. Secondly, the study recommends that insurance firms need to focus on maximizing income variance since it was found to have a positive effect on performance. This would ensure that they derive maximum returns from their operations.
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    Test For Stock Return Anomalies At The Nairobi Securities Exchange
    (International Journal of Information Research and Review, 2017) Njogo, Michael
    Prior empirical studies have identified the existence of various stock return anomalies in several countries stock markets. In Some stock markets, return anomalies are discovered and then they disappear once traders exploit them to earn excess returns. Further, some of the return anomalies are more pronounced in some stock markets than in other stock markets. The purpose of this study was to test the existence of size, value, momentum; profitability and investment stock return anomalies at the Nairobi securities exchange in Kenya. Explanatory research design was adopted in establishing the existence of stock return anomalies at the Nairobi securities exchange in Kenya. The target population was 45 companies that were listed at the Nairobi securities exchange by January 2009 (after excluding companies that were not trading consistently and those that were delisted). A census of 45 companies was used to construct stock portfolios between 2009 and 2014.The existence of stock return anomalies was explored using sorts of returns on anomaly variables and multivariate regressions. The results of the hypotheses tests lead to a conclusion that size stock return anomaly, value stock return anomaly and investment stock return anomaly existence is statistically significant while profitability stock return anomaly and momentum stock return anomaly have an insignificant existence at the Nairobi securities exchange. The developed six factors model incorporating market risk and the five stock return anomalies proxies has a high explanatory power and its F-statistic value indicates that it is an adequate model for explaining some of the stock portfolio return variations (not explained by CAPM) at the Nairobi Securities Exchange in Kenya. This study recommends a policy framework for enhancing factor investing strategies at the Nairobi securities exchange. Factor investing policy framework is based on stock return anomalies that have been proven empirically by researchers to earn a stock return premium in the long run. In adopting a factor investment strategy, investment advisors, retail investors and stock brokers at Nairobi securities exchange should allocate more investment resources to small cap stocks than in big cap stocks, invest more in value stocks than in growth stocks and invest more in stocks of firms with low growth in assets in the current period than firms with high growth in assets in the current period for stock return optimization.
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    Effect of Equity Risk Factors on the Return of Stock Portfolios of Companies Listed at the Nairobi Securities Exchange in Kenya Between 2009 and 2014
    (Research Journal of Finance and Accounting, 2017) Njogo, Michael; Simiyu, Eddie
    Investors and investment advisors strive to make the best investment decisions when forming a stock portfolio. However, at the Nairobi securities exchange in Kenya, most investors are not optimizing the return of their stock portfolios because they do not consider relevant factors when investing in stocks. In particular, they do not consider equity risk factors when forming stock portfolios. In the United States of America, Dimensional fund advisors have shown that if active investors tilt their stock portfolio towards equity risk factors such as value risk and size risk, the return of the stock portfolio formed is better than that of the market portfolio. Capital asset pricing model has been the generally accepted model for explaining the relationship between risk and stock portfolio return variations. However, the restrictive assumption of employing the market risk as the only source of risk in capital asset pricing model led to the introduction of multiple factors models that attempt to identify other sources of risks that are disregarded by the capital asset pricing model. Available empirical evidence suggest that much of the variation in stock returns related to size risk, value risk, momentum risk, profitability risk and investment risk is left unexplained by Capital asset pricing model. This motivated the researcher to examine a model that adds the five risk factors to capital asset pricing model. As a result, a six factors model was developed and used to determine the ability of the combined six equity risk factors in explaining the variation of stock returns at the Nairobi securities exchange in Kenya. The general objective of this study was to establish the effect of equity risk factors on the return of stock portfolios of companies listed at the Nairobi securities exchange in Kenya between 2009 and 2014. The study adopted the explanatory research design and the target population was 45 companies that were listed at the Nairobi securities exchange by January 2009 (after excluding companies that were not trading consistently and those that were delisted). A census of 45 companies was used to construct stock portfolios between 2009 and 2014. Data was analyzed using a modified Fama and French (1996) multivariate time series regression methodology. The study found out that market risk, size risk, value risk and investment risk have a significant effect while profitability risk and momentum risk have a weak positive effect on the return of stock portfolios at the Nairobi securities exchange. This study recommends a framework for enhancing factor investing strategies, introducing exchange traded funds index and reviewing policies on price determination of listed stocks. The study availed to investors, investment advisors and academia the equity risks that are worth considering when constructing a stock portfolio at the Nairobi securities exchange for optimal stock returns.