The Impact Of Stock Exchange In The Development Of Capital Market (A Case Study Of Nigeria Stock Exchange)
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.
Table of Contents
- Title page
- Table of content
- 1.1 Background of the Study
- 1.2 Objective of the Study
- 1.3 Scope of the Study
- 1.4 Statement of the Problem
- 1.5 Research Hypothesis
- 1.6 Limitation of the Study
- 1.7 Delimitation of the Study
- 1.8 Significant of the Study
- 1.9 Definition of Terms
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 capital market
- 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
3.0 Research Methodology
- 3.1 Introduction
- 3.2 Research Design
- 3.3 Method of Data Collection
- 3.4 Sampling Population
- 3.5 Research instrument
- 3.6 Questionnaire Design
4.0 Data Analysis and Presentation
- 4.1 Introduction
- 4.2 Data Analysis and Presentation
- 4.3 Interpretation of Data and Analysis
- 4.4 General Comments
5.0 Summary Conclusion and Recommendation
- 5.1 Summary
- 5.2 Conclusion
- 5.3 Recommendation
1.1 Background of the Study
The capital market is a market which deals in long – term loans. It supplies industry with fixed and working capital and finances medium- term and long term borrowing of the federal, state and local governments.
The capital market deals in ordinary stocks and shares and debentures of corporations and bond and securities of government and it should be noted that the fund which flow into the capital market come from individuals who have savings to invest.
In another sense the stock exchange plays an important role in the economy, it determine the economics health of the country and has a pivotal role in mobilizing resources for the development of capital market. It is patient to know that the capital market functions through stock exchange market under the stock exchange of every country.
A case study of Nigeria stock exchange, the contribution of stock exchange in the banking sector and in the economic will being of the public
In a nut shell, the tock exchange aims to provide an atmosphere when buyer and seller of securities must to buy and sell shoves (securities) the study on the role of stock exchange in the development of capital market will focus on:
- The role of stock exchange in Nigeria and the capital market
- History of Nigeria stock exchange and it past operations
- Effect and important of stock exchange as a unit of capital market on the industrial development.
- Impact on the investor and issues of the securities
- Nature of the capital market and exchange in the capital market operations.
- Participant in the capital market
- Problem of Nigeria stock exchange in the capital market operations
1.2 Statement of the Problem
The focus of the study will be to identify the role of stock.
Stock exchange in the development of capital market, and Nigeria stock exchange will be the case- study. In the course of the study answer will provided to the following.
- What are the role of stock exchange in Nigeria in the capital market
- What is the historical background of stock exchange and review of their operation in the past.
- What are the effect and importance of stock exchange as a unit of capital market on industrial development.
- What are the participant in the capital market and exchange in the capital market operation
- Who are participant in the capital market and exchange in the capital market operation.
- What is the nature and who are the participant of the capital market
- What are the limitation of problems of Nigeria stock exchange in the capital market operation
1.3 Aims and Objective of the Study
It is important to know that every country how their own stock exchange which contribute and determine the economy of respective country. This research work will only cover Nigeria stock exchange and it role in the development of the Nigerian capital market. By so doing, the main reason for embarking on these studies is to derived answer to the statement of the problems, which will fill the existing knowledge gap.
The aims and objective of this study include:
- To focus on the examination of the role of stock exchange in Nigeria, and the capital market.
- To show the history of stock exchange and review of their operation in the past.
- To bring into time light the effect and important of stock exchange as a unit of capital market on the industrial development.
- To show the significant impact of the investor and issue of securities
- To know the nature of participant of the capital market and exchange in the capital market operation.
- To know the nature and participant of the capital market.
- To bring out limitation of problems of Nigeria stock exchange in the capital market operation.
1.4 Statement of Hypothesis
The general hypothesis that will be tested in the study of the research is as follow
- Ho: the role of stock exchange has not develop the capital market
Hi: the role of stock exchange has developed the capital market
- Ho: the stock exchange performs no function to the country
Hi: the stock exchange perform functions to the country.
1.5 Research Methodology
Base on the topic, the study will use primary and secondary sources of information as well as other psychological devices;
The primary sources will include:
- Response from questionnaire
- Materials from the case study materials,
- Materials from the internet.
The secondary source will include
- Text books
And the psychological devices will be to studying their behavior scenically and much emphasis will be places on the questionnaire as it will cover a wider population than when other instrument (s) are being for the same purpose
question: list of question will be drawn for respondent to answer. The study will avoid difficult and ambiguous question, the question will be simple and straight forward and rooms for the expression of views / findings of respondents (s) regarding the study will be created a complete presentation of population from which it is drawn a sample, well be precisely be part of the population, as it is a subject of the entire population of any kind.
1.6 Definition of Terms / Concepts
In the stud emphasis may be placed on some wards and may be used repeatedly which it meaning they differ from English dictionary meanings, such wards and short meaning needed to be know to started below for these proposed/ study:
- The capital market which is the market that deal with long- term fund
- Stock market operators: these are those that are included in the operation of the stock market such as jobber, stock brokers, investment advisers, and issuing houses etc
- Prim market which is regarded as the original or the main market
- Second tier securities market which is segment of capital market where small companies operate.
- Ordinary and reference shares: ordinary shows are common shares and generally carry no fixed rate while the preference share usually have fixed rate of dividend and their holders are paid if company makes profit
- To mention few other could be bulls, bear, stag and others which the meaning will be in details in the study.
1.7 Plans and Organization of the Study
The research work will be divided into five chapters. Each chapter contain the following:
Chapter one will have the background of the study, objective of the study, scope of the study, statement of the problem, research hypothesis, limitation of the study , significant of the study and definition of terms
Chapter two will b theoretical frame work which will forces on the laterally review of Nigeria stock exchange and capital market, reason for establishment of the Nigeria capital market, composition of capital market, Nigeria stock exchange, development of stock exchange in Nigeria, functions of the stock exchange and instrument use in stock exchange.
Chapter three will state briefly the analysis of various method used in data collected and emphasized on research design, method of data collecting sampling population, questionnaire design.
While the chapter four will contain introduction, data analysis and presentation, interpretation of data and analysis, testing of hypothesis and general comment.
And finally chapter five will discuss summary, conclusion recommendation and suggestion for further studies
The will state the list of materials text books journal magazine consulted in the writing of the proposal and those that will be use to write the main project.
5.0 Summary, Conclusion and Recommendation
The research work examined the role of Nigeria stock exchange in relation to the economic bearing in mind the significance and position change that have taken place in capital market and to regulatory of the capital market.
From the researcher perspective it is deduced that the institution as a unit capital market , has been instrumented in the efficient management of the economy because it contributes immensely to the growth of the economy through their intimidating activities of channeling fund to the economy and proper allocation of resources among the most completing ends
Apart from significant development in the industrial growth the Nigeria stock exchange (NSE) through 1985 second tier securities market has attracted small business to facilitate of the market to such viable companies to raise fund for expansion and modernization, also the level of job creation by the company has been rising
By and large, if stock exchange operation would improved at all in Nigeria due to past performance in relation to the economy activities of the country . the stock exchange together with order regulatory authorities of capital market such as securities and exchange commission should be examined above recommendation
The Nigeria government and market operators most demonstrate great commitment in the promotion of stock exchange market in the country through the following:
Relaxation of existing rigid exchange countries regulation to allow foreign portfolio investors to invest in their stock market.
Proper definition of the role of the private sector and the stock market within the economy.
Adoption of sound micro economic policies namely: realistic exchange rate, realistic interest rate and effective de-regulation of the economy
Increase in public awareness about the security market this could be done through market operation and other regulatory authorities cooperation among capita market especially in Nigeria capital market participants
Privatization and commercialization of government enterprises privatization has proved to the real force of growth many emerging stock exchange , as it quickly increase the size and liquidity of small market, twenty-three privatized enterprises have been listed on the Nigeria stock exchange in the 1st three years of the securities on behalf of “investor” they are mainly members of stock exchange who engaged in this operations and paid on commission basis called “brokages”
The position of Nigeria stock exchange in the capital market and its impact to improve capital market is unique as a unit of Nigeria capital market.
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