%0 Journal Article
%T The Impact of Pension Funds¡¯ Investments on the Capital Market¡ªThe Case of Lusaka Securities Exchange
%A Nsama Musawa
%A Clement Mwaanga
%J American Journal of Industrial and Business Management
%P 1120-1127
%@ 2164-5175
%D 2017
%I Scientific Research Publishing
%R 10.4236/ajibm.2017.710080
%X The
Lusaka Securities exchange (LuSE) is one of the developing stock markets in
Africa. As of 2015 it had only 22 listed companies with the market capitalization
of about 5849 million dollars. There </span><span style=\"font-family:Verdana;\">are </span><span style=\"font-family:Verdana;\">a number of sectors that contribute to the growth of
the stock market in Zambia. This study focused on the insurance sector, the
pension funds mobilized contributions from the working population and invested
in various assets among them is equity. According to the pension scheme
investment guidelines (2011), pension funds are mandated to invest not less
than 5% but not more than 70% of their total investment in equity. Hence, one
would expect pension funds to have a good effect on the Zambian capital market.
However the impact cannot be conclusive without undertaking a study to assess
the effect of pension funds and capital market. Therefore, this study was an
attempt to investigate the long run effect of pension fund¡¯s investment on the
Lusaka securities exchange performance.</span><span style=\"font-family:&quot;\"> </span><span style=\"font-family:Verdana;\">The study used quarterly
data for the period ranging from January 2009 to December 2015, and employ</span><span style=\"font-family:Verdana;\">ed</span><span style=\"font-family:Verdana;\"> the cointegration and
Vector Error Correction</span><span style=\"font-family:Verdana;\">;</span><span style=\"font-family:Verdana;\"> the results
prove the existence of long run relationships between the pension funds and the
market capitalization. This relationship implies that if pension funds are
encouraged to invest more in equity, it will contribute to the growth of
capital market, hence developing. Recommendations have been made to policy markers
on how they can use the sector to improve the performance of the capital market</span><span style=\"font-family:Verdana;\">.
%K Stock Market Capitalization
%K Pension Fund Investments
%K Cointergration
%U http://www.scirp.org/journal/PaperInformation.aspx?PaperID=79535