CONTENT OF FINANCIAL REPORTS AND MARKET REACTION OF QUOTED FINANCIAL FIRMS IN NIGERIA

ABSTRACT The inconsistent and inadequate financial reporting can erode investor confidence. Investors rely on financial reports to make informed decisions, and when these reports are perceived as unreliable, it can lead to decreased trust and increased market volatility. Based on this, the study, investigate the content of financial reports and market reaction of quoted financial firms in Nigeria, covering, 2012 to 2023. The population consists all the 45 quoted financial firms in Nigeria as at 31st December, 2023 while filtering criteria was used to arrive at a sample size of thirty-two (32) financial firms in Nigeria. The hypotheses were tested using the random effect regression model after conducting some diagnostics tests. The result showed that return on equity (ROE) has a significant positive effect on market share prices (MSP) of quoted financial firms in Nigeria. However, the results further showed that dividend yield (DY) and profit retention ratio (PRR) have insignificant positive effects on market share prices (MSP) of quoted financial firms in Nigeria for the period under review. The study recommended among others, that quoted financial firms in Nigeria should aim for a balanced approach between profit retention and dividend distribution. While retaining profits for reinvestment promotes long-term growth, providing regular dividends ensures that shareholders receive immediate returns. Firms should carefully assess their financial situation and future growth opportunities to determine the optimal retention ratio. The study also recommended that the quoted financial firms should consider maintaining or increasing dividend payouts to enhance their dividend yield, as this has been shown to positively influence market share prices. This can help attract and retain investors, boosting the firm’s market valuation.

0 19 May, 2026

pg: 13

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