The Impact Of Stock Exchange In The Development Of Capital Market

ABSTRACT: 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 banking sector and even if 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, broker 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.

PROPOSAL

A cash 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 stick 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 come 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.

Also the stock exchange is not only providing the much required fund for the boosting the business but also providing a common place for stock trading. It is the stock market that makes the stock a liquid asset unlike the real estate investment. It is the stock markets that make it possible to sell the stock at any point in time and get back the investment along with the profit the make the stocks much more liquid in nature and thereby attracting investors to invest in the stock.

TABLE OF CONTENTS

Title page

Certification

Dedication

Acknowledgement

Abstract

Tables of contents

CHAPTER ONE

1.0   Introduction

1.1Background of the study

1.2Objective of the study

1.3Scope of the study

1.4statement of the problem

1.5Research Hypothesis

1.6Limitation of the study

1.7Delimitation of the study

1.8Significance of the study

1.9Definition of terms

CHAPTER TWO

2.0   Literature Review

2.1 The capital Market

2.2 Reasons for Establishment of the Nigeria capital Market

2.3 Function of the Nigeria

2.4 Composition of Capital Market

2.5 Nigeria Stock Exchange

2.6 Development of Stock Exchange in Nigeria

2.7 Function of the Nigeria Stock exchange

2.8 Instrument used in stock Exchange

CHAPTER THREE

3.1Introduction

3.3Research Design

3.3Method

3.4Sampling Population

3.5Research Instrument

3.6Questionnaire Design

CHAPTER FOUR

4.1Introduction

4.2Data analysis and presentation

4.3Interpretation

4.4general Comments

CHAPTER FIVE

5.0 Summary Conclusion and Recommendations

5.1 Summary

5.2 Conclusion

CHAPTER ONE

1.0            INTRODUCTION

1.1 BACKGROUNDOF THE STUDY

The Nigeria Stock Exchange provides 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 anyone who has surplus fund after current living expenses and a reserve for an emergency might decide to invest such surplus fund insecurity.

The Stock Exchange is otherwise known as “security market”the stock exchange play on important role the economy in mobilizing resources for development of capital market the stock exchange provide facilities for bringing together suppliers and users of capital security market.

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 describe the stock exchange as the corner stone in the nation’s 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 broker’s security registers.

The establishments of the exchange in 1960 market the informal birth of Nigeria capital market which serves as a range of purpose including the following.

1. Mobilization of savings from numbers economics units of economics growth and development
2. Provision of adequate liquidity to investor.

iii. Broad of the ownership base of assets as well as the creation of private sector.

1. Provision of alternative source of fund for government other than taxation
2. Encouragement of more efficient of given amount of tangible wealth through changes in the composition and ownership wealth.
3.        Encouragement of more efficient allocation of new investment though price mechanism

vii.Promotion of rapid changes that exist to link together sellers and buyer of quoted investment. They help to widen their 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 programmers.

1.2 OBJECTIVE OF THE STUDY

The main aims of the research work are as follower

1. The focus on the examination of the role of stock exchange in Nigeria in development of capital market.

•    ii.    To show the history of stock exchange and review of their operation in the past

•   iii.    To bring into limelight the effect and importance of stock exchange as a unit of capital market on industrial development

•    iv.      To show significant impact on the investor and issues of the securities

•    v.    To know the nature and participant of the capital and exchange in the capital market operation

•   vi.      To know the nature of participant in the market

•   vii.       To bring out limitation of problems of Nigeria Stock Exchange in the capital market operation.

1.3 SCOPE OF THE STUDY

With the 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.

v

Financial problems: considering the global economic meltdown and devastating economic problems confronted by non-political aligns in the country, the research is confronted with finances inadequacy due to other academe  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.

v

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 material to be used for the write-up

v

Transportation problem: During the period of caring out this research work in collection of data the researcher spent a lot of money on cost of transport fare(s) and on some occasion the researcher have to “trek”

1.4 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.

1.5 RESEARCH HYPOTHESIS

The following hypothesis is considered as the basis of the question to be answered for the purpose of the study

Ho: The role of stock exchange has not developed the capital market

Hi: The role of stock exchange has developed the capital market

Ho: The stock exchange market perform no function to the country

Hi: The stock exchange markets perform function to the country

1.6 LIMITATION OF THE STUDY

It is normal for human being to be face with certain problem in the achievement of a particular objective which should be considered challenges therefore there are numerous difficulties confronted with in carrying out the research work which can be trained to lack of finance to various companies for adequate information gathering  which might have enriched the research work.

1.7 DELIMITATION OF THE STUDY

The research work covers the evolution and historical background as well as role of stock exchange in the development of capital market focuses on Nigeria stock exchange as case study.

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