This paper investigated the relationship between the Dar es Salaam Stock Exchange All Shares Index (DSEI), Exchange rate (EX) and Market capitalisation (MC) using monthly data from July 2009 to December 2013 obtained from quarterly Updates and website of Dar es Salaam Stock Exchange
This paper investigated the relationship between the Dar es Salaam Stock Exchange All Shares Index (DSEI), Exchange rate (EX) and Market capitalisation (MC) using monthly data from July 2009 to December 2013 obtained from quarterly Updates and website of Dar es Salaam Stock Exchange. The regression and correlation techniques were used to establish the relationship. The dependent variable was the Dar es Salaam Stock Exchange All Shares Index while Exchange rate and Market capitalisation, were independent variables of regression. The results show that the Exchange rate and the Dar es Salaam Stock Exchange All Shares Index have positive regression coefficient, Market capitalisation and Dar es Salaam Stock Exchange All Shares Index also have positive regression coefficient. Also these three variables were found to have positive correlation coefficients. From these results obtained, we suggested that there is strong positive linear relationship between Market capitalisation and Dar es Salaam Stock Exchange All Shares Index, and moderate positive relationship between Exchange rate and the Dar es Salaam Stock Exchange All Shares Index.
School of Economics, Wuhan University of Technology, Wuhan 430070 China