CHAPTER ONE
1.O INTRODUCTION
A STOCK exchange can be described as a place where security bonds stocks, shares of various types are traded, openly and where one can purchase or sell any of such securities with relatives case.
Securities are documentary evidence of ownerships or entitlement to claim upon the assets of issuing organization which may be a business firm government or quasi government institution. There are documentary evidence usually have no fixed or absolute value which are subjectively determined by those buying and selling them.
Stock exchange is also a place where enormous capital which is required to operate the huge industrial and commercial cooperation of today can be raise in such large amount and of some competitive term, (cost, length of negotiation condition etc) that no other institution in a capitalist system can possibly match stock exchange is a vital economic institution, the height of development the world has attained makes the stock exchange market services indispensable the SEM is seen as a vehicle of fund mobilization and the development of local capital in Nigeria.
The stock exchange market is meant to be strong and very important source of capital in the capital market for the development of West African sub region. Over he years, the stock exchange market has been on the down ward swing and is characterized by low growth the market has defined all necessary change made to strengthen of stock exchange market is characterized by usable market growth, low level of income saving corruptions, inflation of market prices and lack of interest there and may more have made the stock exchange market to loss focus thereby causing a downward movement of the economy.
- HISTORICAL BACKGROUND OF THE STUDY
The Nigerian stock exchange was established in 1960, as the Lagos stock exchange, Nigeria has formed an active capital market. Before 1961, nearly all formal savings and deposit went through the banking system while then masters invested major capital for the country on the London stock exchange. However following the establishment of the central baking Nigeria (CBN) in 1950, it was logical to have a stock exchange in 1960, which commenced operation in 1961, the foundation was entered for the operation of the Nigeria capital market.
It was incorporated via the inspiration and supported of businessmen and the deferral government through the CBN but owned by about 300 members. The membership includes financial institutions, stock brokers and individual Nigeria high integrity who have contributed to the development of the stock market the Nigerian economy. The council members (board of director) of the stock exchange are elected at apiece annual general meeting by members of the exchange. The exchange is a self-regulatory organization (SRO), making and enforcing rules for its members. In 1977, the exchange was reorganized and renamed the Nigerian stock exchange (NSE).
Today the (NSE) has 10 functional trading floors in different parts of the country, namely: Lagos, Abuja, Kaduna, Port-harcourt, Kano, Onitsha, Ibadan, Yola, Benin, Ugo, and Ilorin. Companies listed on the exchange cut cross ways the economic sectors of Nigeria and include local affiliates or subsidiaries of multinals. The exchange has two tiers out 1st tier securities and 2nd tier securities. Apart from the regulatory actions of exchange as an SRO, government oversight on the capital market in Nigerian is reached through the operations of the Securities and Exchange Commission (SEC). It maintains surveillance over the securities market to ensure clean and equitable dealing in securities protecting the integrity of the securities market against arising from the practice of insider trading.
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