The Effect of Selected Macroeconomic Factors on a Stock Market Performance in Zambia


  • Chikumbi Chola Graduate School of Business, University of Zambia, Lusaka, Zambia



macroeconomic factors, stock market, stock exchange


This was a study on the effect of selected macroeconomic factors on a stock market performance in Zambia. The study objectives where to determine the effect of the exchange rates on the LuSE all shares index in Zambia; to investigate the effect of inflation on the LuSE all shares index in Zambia and to establish the effect of interest rates on the LuSE all shares index in Zambia. Interest rate, inflation rate and exchange rate where the independent variables while stock market index was the dependent variable. The study targeted 24 firms listed on the Lusaka Stock Exchange. The study used secondary data which was sourced from the Bank of Zambia. The findings of the study reveal that the selected macroeconomic variables have an effect on stock market performance. This is because the study findings revealed that interest rate, inflation rate and exchange rate have a correlation with stock market index which can either be positive or negative. From the various tests and correlation models used, based on the study findings, the study concludes that selected macroeconomic factors in the country over the study period have been changing greatly. There were huge variations in the interest rates, inflation rates and exchange rates. Generally, the study concludes that interest rates, inflation rates and exchange rates influence the LuSE performance and can be used to predict the stock market performance. There was a strong and significant relationship between all the macroeconomic factors and the stock market performance. This implies that the macroeconomic environment in Zambia is a key determinant of business activities including the performance of the stock market. As a result, the study recommends that there is need for the Bank of Zambia to maintain a stable foreign currency exchange in order to attract foreign investors to the LuSE.


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How to Cite

Chikumbi Chola. (2024). The Effect of Selected Macroeconomic Factors on a Stock Market Performance in Zambia. Management Journal for Advanced Research, 4(1), 102–113.