Abstract

This study examined sunspots and bubbles of eleven (11) non-financial firms listed on the Nigerian Stock Exchange for a period of six (6) years (2017 to 2022). The rationale for the study was based on the realization that market bubbles and sunspots do affect stock market performance. Hence, the study specified the presence or otherwise of market bubbles in the Nigerian capital market. Employing the Augmented Dickey Fuller (ADF) test, the Phillips-Perron (PP) test statistic and the Johansen System Cointegration tests on two variables (stock prices and dividend payment), the results from the analysis indicate the absence of speculative market bubbles in the Nigerian capital market. This result further suggests that stock prices have not deviated from market fundamentals within the period of investigation. The study recommends that, since the finding of the study has confirmed the absence of market bubbles, it therefore suggests that probably the regulator of the Nigerian market has been very efficient in managing the activities of the market against all forms of malfeasance and market manipulations; hence, stock prices were able to followed market fundamentals. Thus, regulators should either sustain the current policy or improve on it so that the Nigerian capital market will continue to reflect its intrinsic values and normal returns to investors.