Theses and Dissertations
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Item Determinants of Kenyan Government Bond Yields(KCA University, 2017) Balozi, Salome K.Government bond yield is a critical area of knowledge for both bond investors and the government. The rate of return of the government bond is crucially beneficial to the investor, since it is the rate of return on their investment. On the other hand, the government needs to be aware of the trends in its yield to be able to price any new issuance of bonds appropriately. Most developing countries are characterized with ever increasing national budget deficits coupled with rising rates inflations besides escalating interest rates. It is so true that most developing countries are issuing Treasury bonds on monthly basis and the Kenyan government is not exempted from this category. This study had sought to establish the determinants of the Kenyan government bond yields. For the purpose of this study, bond yield is the rate of interest that a bond attracts. This study had the following specific objectives; to establish the effect of a national budget deficit on yield of the Kenyan government bonds, to find out the effect of inflation on yield of the Kenyan government bonds and to assess the effect of interest rates changes on the yield of Kenyan government bonds. This study is of significance to other researchers who will use it as a basis of further research and data governing, fiscal policies makers in the government in deciding on bond pricing and the government bond investors in bond purchasing decisions. This study used secondary data available from the Central Bank of Kenya and the Kenya National Bureau of Statistics. The study adopted a time series analysis research design with regression model. The study had a target population of -Kenyan government bonds that have been in trade from year 1985 -2015. This study adopted regression analysis in order to answer the research questions. This study had sought to establish the degree of association between the determinants considered and government bond yields. Data was analysed using SPSS. Data was presented in frequency tables and inferences made. Finally, conclusions were made on the determinants of Kenyan government bond yields. The study found out that the Stationary R squared of 0.769, 0.661 and 0.653 for the ten-, three- and one-year Kenyan government bond yield respectively. This means that the independent variables (budget deficit, inflation rates and interest rates changes) influence the yield of the ten-, three- and one-year government bond at 76.6%, 66.1 % and 65.3 % respectively when the data is normalized at an ARIMA model. The study recommends bond investors to fully understand the market trends in order to make the right bond purchase decision and the government should benefit in pricing bonds and setting of coupon rates. The study has suggested further studies on determinants of Kenyan bonds with specific emphasis on foreign exchange fluctuations, bond denominations and bond coupon rates.Item Effect of Macroeconomic Factors on Financial Performance of National Social Security Fund in Kenya(KCA University, 2019) Wanyeki, Michael J. G.Studies have shown that firm’s financial performance is influenced by the business cycle. During boom times, firms and households commit larger proportions of their income flow to debt servicing with preference for leverage following a pro-cyclical pattern. Both the demand for leverage and firms' income will rise and fall with the business cycle assuming ceteris paribus. However, studies have proven this not be true from the mixed results on the relationship between the macroeconomic variables and performance of the firms. There are a number of studies globally that indicate the existence of a relationship between the macroeconomic variable and the firm’s financial performance. The National Social Security Fund (NSSF) is an institutional investor whose profitability depends on how other sectors are performing. The funds for instance made a loss of over Sh. 10 billion in 2016 due to the decline in the performance by listed firms at the Nairobi Security Exchange. The purpose of this study is to investigate the effect of macroeconomic factors on the financial performance of National Social Security Fund in Kenya. The objectives of the study are to determine the effect of foreign exchange rates on the financial performance, establish the effect of the inflation rate on the financial performance, assess the effect of level of interest rates on the financial performance and to establish the effect of the Gross Domestic Product on the financial performance of NSSF. The study adopts a descriptive research design in which the target population is financial publication and the Kenya National Bureau of Statistics library. Secondary data was obtained from the NSSF and Kenya Bureau of Statistics and the Central Bank. Data was analysed using economic model and using tests as Johansen cointegration test, Granger causality test and Vector Autoregressive model with the aid of STATA as the statistical software. A regression model was fitted to the data and the results of the study show that GDP, exchange rates and inflation rates had a positive and significant influence on the NSSF in Kenya. The study also shows that though Interest rates have a positive influence of the financial performance of NSFF in Kenya, its impact is insignificant compared to the rest of the variables in the study. There however exists cointegrating relationship between the variables and the study shows that in the long run interest rates and inflation rates have a negative influence on the financial performance of NSSF in Kenya and become statistically insignificant.