Obstacles to developing cultures of good behaviour, and how to overcome them

autocorrelation test, autoregressive test, variance ratios and the non-linear ARCH test. The justification for using all these methods is to ensure reliability of our findings and same time to check for conflicting results based on the use of different statistical test.

In this study we also carry out descriptive statistics (Mean, Median, Standard deviation, Maximum, Minimum and Skewness) to enable us understand and compare the unique statistical properties of stock returns for bull and bear market cycles in Nigeria and China.

Finally, the statistical test for weak form efficiency will be performed using monthly returns for Bull and Bear period separately. In conducting all our analysis we will use Microsoft Excel 2013 and EViews 8 econometric software.

The descriptive statistics obtained in study are presented and analyzed below.

approach of measuring bull and bear market cycle identified two bull market cycles for Nigeria (2000-2007 and 2012-2013) and two bull market cycles for China (1999-2000 and 2006-2007). In the case of Bear Market cycle, we identified one bear market cycle for Nigeria (2008-2009) and three bear market cycle for China (2001-2002, 2004-2005 and 2010-2012). In analyzing the descriptive statistics as presented in Table 4.1, Firstly, the full period results of Nigeria and China for the period of 1999-2014 show that the mean returns for both bull and bear market cycle in Nigeria and China stock market were 0.012 and 0.007 respectively. This means that investors that invested in Nigeria from 1999 to 2014 would make average monthly returns of about 1.2% as against China 0.7%. This means that Nigeria stock market was more profitable to investors when compared with China. The numerous bear market cycle that occur in China could be attributed to the relative returns poor performance of China stock market when compared to Nigeria. The standard deviation of 7%

and 6% for Nigeria and China respectively for the period of 1999 to 2014 shows that the risk (Volatility) in both markets was not significantly different. This means that investors in China bear more risk for lower returns when compared with Nigeria.

Table 4.1 Descriptive Statistics for Bull and Bear Market Cycle for Nigeria and China

Mean Median Stdev Max Min Skewness N BULL & BEAR

Nigeria (1999-2014) 0.012 0.005 0.07 0.38 -0.30 0.27 192

China (1999-2014) 0.007 0.002 0.06 0.32 -0.15 1.11 192

BULL

Nigeria (2000-2007) 0.026 0.025 0.054 0.203 -0.12 0.256 192

Nigeria (2012-2013) 0.030 0.027 0.049 0.145 -0.04 0.680 192

China (1999-2000) 0.026 0.017 0.070 0.279 -0.06 1.862 192

China (2006-2007) 0.067 0.053 0.080 0.213 -0.08 0.185 192

BEAR

Nigeria (2008-2009) -0.034 -0.049 0.131 0.382 -0.306 1.185 192

China (2001-2002) -0.014 -0.021 0.049 0.085 -0.111 0.073 192

China (2004-2005) -0.010 -0.018 0.046 0.105 -0.077 0.821 192

China (2010-2012) -0.010 -0.016 0.043 0.089 -0.126 -0.183 192

Correlation (Nigeria and China) 0.0008 Source: Author (2015)

Secondly, the Bull market period results for Nigeria and China show that the mean returns were all positive. This confirms that positive returns as a measure of bull market was well captured in our data. A look at the results shows that a 2.6% and 3.0% monthly return was witnessed in Nigeria 2000- 2007 and 2012- 2013 bull market cycle. In the case of China we observed 2.6% and 6.7%

monthly returns for the period of 1999-2000 and 2006-2007. This result clearly shows that returns during bull market cycle for Nigeria and China may not be significantly different from each other. This in other words means that investors can make almost similar returns from investing in Bull Run opportunities in both markets. In terms of risk during bull market, we observed that the standard deviation for China (7% for 1999-2000 and 8% for 2006 to 2007) was marginally higher when compared to Nigeria (5.4% for 2000-2007 and 4.9% for 2012-2013).

Thirdly, the Bear market period results for Nigeria and China show that the mean returns were all negative. This confirms that negative returns as a measure of bear market cycle was well captured in our data. A look at the results shows that a -3.4% monthly return was witnessed in Nigeria bear market cycle in 2008- 2009. In the case of China we observed the Chinese‘s stock market witnessed more bear market cycle when compared to Nigeria. In 2001-2002 the Chinese

bear market recorded average negative monthly returns of -1.4% while in 2004-2005 and 2010-2012 it recorded -1.0% and -1.0% respectively. This result clearly shows that investors in Nigeria are more likely to suffer more capital gain loss during bear market trends than investors in China. In terms of risk during bear market, we observed that the standard deviation for Nigeria (13% for 2008-2009) was largely higher when compared to China (4.9% for 2001-2002, 4.6%

for 2004-2005 and 4.3% for 2010-2012). This result also confirms that Nigeria investors are more likely to overreact to downward market trends than Chinese investors.

Finally, the different results found under bull and bear market cycles under our descriptive statistics clearly shows that investors in Nigeria and China are expected to react differently to upward and downward market trends and this could influence statistical results for testing weak form efficiency. This therefore justified our need to study weak form efficiency under bull and bear market cycle for Nigeria and China. In testing for the relationship between Nigeria and China Stock Markets we used the Pearson correlation value of 0.0008 as found in Table 4.1. The result shows that both Nigeria and China stock market are weakly correlated. This can be attributed to the low exposure of Nigeria stock

markets to China stock market and the low investment of Chinese investors into Nigerian Capital Market.

4.2 Weak Form Efficiency under Bull and Bear market cycles in Nigeria