Analysing the Relationship between the Stock Market and Macroeconomic Activities in Namibia

Macroeconomic activities display how the economy is performing, locally and internationally. The macroeconomic indicators do not only indicate economic development but also provide economic information about the asset markets. Such information helps policymakers formulate appropriate policies. It also helps investors to make informed decisions. This study looked at the relationship between the stock market and the macroeconomic activities in Namibia. The autoregressive distributed lag (ARDL) modelling approach on quarterly time-series data for the period 1995 to 2020. The result revealed that industrial production, money supply and real exchange rates had a positive short-run relationship with the stock market. Contrarily, inflation and real interest rate exhibit a negative relation. The error correction model (ECM) showed that there is convergence towards a long-run equilibrium. Thus, there exists a relationship between stock market and macroeconomic activities in Namibia.