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
Table of content
1.0 Introduction 1-2
- Background of the Study 2-5
- Objective of the Study 5-6
- Scope of the Study 6-7
- Statement of the Problem 7-8
- Research Hypothesis 8-9
- Limitation of the Study 9
- Delimitation of the Study 9
- Significant of the Study 10
- Definition of Terms 10-14
2.0 Literature Review
- The Capital Market 15-16
- Reasons for Establishment of the Nigeria Capital Market 16-17
- Function of the Nigeria capital market 17-18
- Composition of capital market 18-27
- Nigeria stock exchange 27-28
- Development of stock exchange in Nigeria 28-27
- Function of the Nigeria stock exchange 27-34
- Instrument Used in Stock Exchange 34-36
3.1 Introduction 37
3.2 Research Design 37-39
3.3 Method of Data Collection 39-34
3.4 Sampling Population 40-42
3.5 Research instrument 42-43
3.6 Questionnaire Design 43
- Introduction 44
- Data Analysis and Presentation 44-45
- Interpretation of Data and Analysis 45-58
- General Comments 58-
- Summary Conclusion and Recommendation
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
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
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.
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.
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.
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.
- 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
- 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 programmes.
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 market.
- 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”