ASSESSING THE IMPACT OF STOCK EXCHANGE IN THE DEVELOPMENT OF CAPITAL MARKET
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A case study of Nigeria, the contribution of stock exchange in the banking sector and in economic well being of the general public.
In a nutshell, the stock exchange aims to provide an atmosphere where buyer and sellers of securities meet to buy and sells shares (securities)
The importance of stock exchange cannot be over emphasized in the banking sector and even it performs prominent roles in Nigeria economy at large.
In developing our economy in Nigeria in Banking sector, with stock exchange had came into being so as to perform this active part in banking and Nigeria as well, in view of the above, the stock exchange market aimed at motivating and encourage the Investor, Brokers as well as the general public to have improvement in their aims of buying and selling securities, through proper usage of the instrument used in the stock exchange market.
- background of the study
The Nigeria stock exchange provide a market where holding of existing “ quoted” shares wishing for sell; such share be sold by making contact with individual and institution which are interested in buying and selling of shares, stocks bonds and security.
Also any one who has surplus fund after current living expenses and a reserve for an emergency might decide to invest such surplus fund in security.
The stock exchange is otherwise known as “ security market” the stock exchange play on important roe in the economy in mobilizing resources for development of capital market, the stock exchange provides facilities for bringing together suppliers and users of capital
A stock exchange therefore, is a market where large / small shares of companies and government securities are traded.
Former director general of the Nigeria stock exchange apostle H.I Alike describe the stock exchange as the corner stone in the nations capital formation and the achieving of the engine of the financial institution resolve for example.
Nigeria security and exchange commission (N.S.E.C) of public enterprise, savers, underwrite issuing houses, fund user, stock brokers, security registers.
The establishment of the exchange in 1960 market the informal birth of Nigeria capital market which serves as a range of purpose including the following.
- Mobilization of savings from numerous economics units of economic growth and development.
- Provision of adequate liquidity to investor.
- Broad of the ownership base of Assets as well as the creation of private sector.
- Provision of alternative source of fund for government other than taxation.
- Encouragement of more efficient allocation of new investment through price mechanism
- Encouragement of more efficient of given amount of tangible wealth through changes in the composition and ownership wealth
- Promotion of rapid changes that exist to link together sellers and buyer of quoted investment. They help to widen there base of ownership of public companies. Stock liquidity also provides especially for making it easy for government and industries to raise fund (s) for development of their
1.2 OBJECTIVE OF THE STUDY
The main aims of the research work are as follows:
- To focus on the examination of the role of stock exchange in Nigeria in the development of capital
- To show the history of stock exchange and review of their operation in the past
- To bring into limelight the effect and importance of stock exchange as a unit of capital market on industrial development
- To show significant impact on the investor and issues of the securities
- To know the nature and participant of the capital and exchange in the capital market operation
- To know the nature of participant in the capital market.
- To bring out limitation of problems of Nigeria stock exchange in the capital market operation.
1.3 Scope Of The Study
With available data on the Nigeria stock exchange system the case study will focuses its attention on the management and role of the stock exchange system.
This research work was not carried out without difficulties, many of the limitation which is considered very important are listed below:
- Financial Problem: considering the global economic melt down and devastating economic problems confronted by non- political aligns in the country, the researcher is confronted with financial inadequacy due to other academic commitment which involves money, to say categorically that the cost used in caring out this research work involves thousand (s) of naira. It is not an over statement
- Time Factor: Another prominent obstacle faces by the researcher is that of time factor. Talk about the time took to travel, planning organizing and collecting of materials to be used for the write-up
- Transportation Problem: During the period of carrying out this research work in collection of data the researcher spent a lot of money on the cost of transport fare (s) and on some occasion the researcher will have to “trek”
- STATEMENT OF THE PROBLEM
The presentation is mainly concerned with the role of stock exchange in the development of capital market in Nigeria stock exchange.
In this research work, the role of stock exchange in Nigeria stock exchange shall be thoroughly examined with particular emphasis on the following
- Exchange rate problem the unstable nature of the exchange rate is a major headache to the Nigeria stock exchange prior to march 1992, exchange rates were still easy and investors could be able to invest their money
- The number of companies trading on the floors is alarmingly affected by the operation of the exchange