ROLE OF MARKET IN A DEVELOPING ECONOMY (CASE STUDY OF STOCK EXCHANGE)
CHAPTER ONE
OVERVIEW OF THE STUDY
The capital market is the market for dealings,( that is lending and borrowing ) In long –term loan able fund. The market is a source from which industries obtain its capital for establishment expansion and modernization and from which the government borrows on long term basis for development purpose it offers access to varieties of various instrument that enable economic agent to pool, price and exchange risks through assets with affricative fields liquidity and risk characteristics. It encourages savings in financial form. This is very important for government and other institutions in need of long-term funds and for suppliers of long-term fund who because of the native of their liabilities undertake to maintain parts of their assets in the relatively liquid form (Ekeizie 1997)
According to Kanu N.O.N (2004) capital market refers to that market for the mobilization of medium and long term fund. From the surplus units for allocation to the deficits units of the economy the market provide opportunities for the insurance and resale’s of government securities co-operate funds, stocks, shares, and mortgage loans.
A broad definition of the term capital market according to Alile (1986)
The entire financial systems, commercial banks and other financial institution providing short term and long term to finance both consumption and investment while an intermediate definition would include only those institution which are concaves with providing with long term , the anew definition of capital market rulers to it as involving the problem and prospects of equity investment
This relates to the issue an d market of share bonds debentures and other long term using the services of brokers dealers ad under writer
A sketch of a capital market
The presidency
The federal ministry of finance
Securities and exchange commission
Capital market
Nigeria stock exchange
Stock brokers and issuing house
Instrument
1.1 It is important we know that the capital market was not in existence before the independent in 1960, rather what was in existence was a financial system . the absence of a capital market within that period s hindered economic development the won exchange of this market to invest them in the country meant that Nigeria who had surplus fids had no such market to invest them in the country as a result of this they repatriated such funds for investment overseas I hand on thus resulting to export of capital which would have use in the economic development of Nigeria in addition it resulted to lack market
Where Nigeria industrialist and business men course raise capital for the operation and constitution for their business on the other side of the government there was o effective tool for monetary police and control with the above situation there is no need to provide a local government market for the borrowing and handing of long term funds for the economic development of Nigeria to achieve this objective the central bank of Nigeria went into operation on 1st of july 1959 in that same year the Nigeria stock exchange was established and the actual operation started in1961 with in the listed on the exchange the most of the listed companies have foreign/multinational affiliation and represent across section of the economy ranging from agriculture through manufacturing to service
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