CHAPTER ONE
1.0 INTRODUCTION
1.1 OVERVIEW OF THE STUDY.
The capital market is the market for dealings (that is lending and borrowing) in longer-term loanable fund. The market is the source from which industry obtains its capital for establishment, expansion and modernization and from which the government borrows on long-term basis for development purpose. It offers access to variety of financial instruments that enables economic agents to pool, price and exchange risk. Through assets with affricative yields, 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 funds who, because of the nature of their liabilities, undertake to maintain part of their assets in the relatively liquid form (Ekezie 19997).
According to Kanu N.O.N (2004) capital market refers to that market for the mobilization of medium and long term founds from the surplus units for allocation to the deficit units of the economy. The market provides opportunities for the issuance and resale of government securities, corporate bonds, stock, shares and, mortgage loan.
A broad definition of the term capital market according to Alile (1986) includes the entire financial system, commercial banks and other financial institutions providing short, medium and long term loans to finance both consumption and investment while an intermediate definition would include only those institutions which are concerned with providing long-term credits however, the narrow definition of capital market rulers to it as involving the problem and prospects of equity investment. The relates to the issue and market of shames, bonds, debentures, and other long-term securities using the service of brokers, dealers and underwriter.
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