0. International Science, Technology, Education, Arts, Management & Social Sciences (iSTEAMS) Research Nexus Conference 2015
11th – 13th March, 2015
University Auditorium
University of Ilorin,
Ilorin, Kwara State, Nigeria

1. BY SIYANBOLA, A. A., OGBOLE, F. O. & MASOYI, D. A.
PRICE MODELS AND THE VALUE RELEVANCE OF ACCOUNTING INFORMATION OF LISTED DEPOSIT MONEY BANKS IN NIGERIA BY
SIYANBOLA, A. A., OGBOLE, F. O. & MASOYI, D. A.
11th March, 2015

2. Overview Introduction Problem Statement Methodology Observations
11th March, 2015
Overview
Introduction
Problem Statement
Methodology
Observations
Major Findings
Conclusions
Recommendations

3. 11th March, 2015
Introduction
Value relevance (VR) research evolved to generate empirical evidence of statistical relationship between accounting numbers and corporate value.
Objective is to assess value relevance of accounting information (dividend, book value and earnings) of listed Deposit Money Banks in Nigeria.
Metric of Value relevance is the adjusted R2 from regression analysis.

4. 11th March, 2015
Problem Statement
Previous studies on value relevance of accounting information are inconclusive.
Inability of investors to measure exact relationship between the price of the stock and the financial statements of listed Deposit Money Banks (DMB).
None of previous studies explored the value relevance of accounting information of listed DMBs in Nigeria.
Nigerian investors over reliance on dividend as the most value relevant accounting information.

5. Methodology Ohlson (1995) Residual Income Valuation (Price) Model.
11th March, 2015
Methodology
Ohlson (1995) Residual Income Valuation (Price) Model.
Period of study
Sample size comprises of eight out of fifteen listed DMBs as at 31 December, 2012.
Data were extracted from the Daily Official List of the Nigerian Stock Exchange and the published financial report of sampled DMBs.
Method of analysis is OLS using stata 12.

6. 11th March, 2015
Models Specification
MVBVjt = β0 + β1EBVjt + β2CBVjt + β3DIVBVjt + εjt (1)
MVBVjt = β0 + β1EBVjt + εjt (2)
MVBVjt = β0 + β2CBVjt + εjt (3)
MVBVjt = β0 + β3DIVBVjt + εjt (4)
The variables were deflated with the opening book value of equity to reduce the incidence of heteroscedasticity.

7. Model Fitness (Model 1) Source Sum of Squares d.f. Mean square F P
11th March, 2015
Model Fitness (Model 1)
Source
Sum of Squares
d.f.
Mean square F P
Regression
2.3535 3
.7844
16.33
0.0000
Residual
2.8819 60
.0480
Total
5.2354 63
.0831
F critical = 2.76

8. Data Normality 11th March, 2015
The plot shows a slight deviation from normality which is a trivial deviation from normality. Therefore, we can accept that  the residuals are close to the normal distribution Gujarati (2004).

9. Heteroscedasticity Test
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Heteroscedasticity Test
There is no pattern to the residuals plotted against the fitted values, hence we can conclude that the data are homoscedastic.

10. Multicollinearity Test
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Multicollinearity Test
Variance Inflation Factor Table
. estat vif
Variable
VIF
1/VIF
DIVBV
1.4
CBV
1.27
EBV
1.24
Mean VIF
1.30
The VIF is less than 5 hence there is absence of multicollinearity.

11. 11th March, 2015
Observations

12. 11th March, 2015
Observations (contd.)

13. 11th March, 2015
Observations (contd.)

14. 11th March, 2015
Major Findings
Accounting information of listed DMBs is value relevant in the period
Book value is more value relevant than dividend.
Earnings which is adjudged to be the most value relevant accounting information for financial service firms is found to be value irrelevant in determining the market value of listed DMBs in Nigeria.

15. 11th March, 2015
Conclusions
The study concludes that the primary accounting information (earnings, dividend and book value) are collectively value relevant. Equally noteworthy is the fact that book value is the most value relevant information, followed by the dividend. On the contrary, earnings remained value irrelevant in the models employed in the study. To this end stakeholders in the capital market are advised to do more specifically to enhance value relevance of earnings.

16. Recommendations 11th March, 2015
Shareholders of Nigerian DMBs need to intensify their oversight functions.
Regulatory agencies should ensure greater effectiveness in their regulatory functions.
Directors should pay more attention to the accounting information specifically to enhance their value relevance.
Prospective shareholders need to pay more attention to book value whenever they choose to invest in Nigerian DMB.

17. 11th March, 2015
Appendix
Pooled Regression result for Model 1

18. THANKS FOR TAKING YOUR TIME TO LISTEN
11th March, 2015
Appreciation
THANKS FOR TAKING YOUR TIME TO LISTEN