An Examination of the Impact of the Macroeconomic Factors on the Performance of Stocks Listed on the Uganda Securities Exchange
Mutagana, Michael Balimunsi
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This study examines the influence of foreign exchange rate volatility and interest rate, on the stock performance of the firms listed on the Uganda Securities Exchange (USE). Using the Arbitrage Pricing Model on 16 firms for a ten (10) year period. The findings of this study suggest that increase in foreign exchange rate, and interest rate reduces the performance of the stocks of the listed firms in USE. This implies that when the Uganda shilling depreciates against the US dollar or when interest rates increase, the performance of stocks on the USE will shrink and vice versa. The major contribution, is the localization of research findings on how movements in macroeconomic factors affect performance of stocks.