MARKET RISK AND FINANCIAL PERFORMANCE OF OIL AND GAS FIRMS LISTED ON NIGERIA EXCHANGE GROUP PLC.

Evelyn Agbasi, Emmanuel Onyeka Ejiofor, PhD, Professor Joseph Uche Azubuike, Assoc. Prof. Lawrence Edeh, Festus Ubogu, PhD

Abstract


This study examined the effect of market risk on financial performance of oil and gas firms listed on Nigeria exchange limited from 2018 to 2023. Four objectives were set to guide the study which included investigating the effect of exchange rate risk, commodity price, equity price risk and interest rate risk on the financial performance of firms sampled. Six oil and gas firm were sampled from the total of eight of them listed on the stock exchange as at 31st December 2023. Secondary data were collected from Central Bank of Nigeria’s Statistical Bulletin and the financial statements of the firms which for the periods under review. The data were analysed with descriptive statistics, correlation and ordinary least square regression analysis. The results there from indicate that exchange rate risk has significant effect on financial performance of Oil and Gas firms. Moreover, interest rate risk has insignificant effect on financial performance. Again, results show that commodity price risk has no significant effect on financial performance. Equity price risk has no significant effect on financial performance of firms in Oil and Gas sector listed on Nigeria stock market. The study recommends among other things that the firms should engage hedging to control exchange rate risks.


Keywords


Market risk, financial performance, foreign exchange.

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