THE STOCK EXCHANGE MARKET: CHALLENGES AND PROSPECTS Case Study of Nigeria Stock Exchange

TABLE OF CONTENTS

Declaration.. iii

Certification.. iv

Dedication.. v

Acknowledgementvi

Table of Contents. vii

Abstractix

CHAPTER ONE.. 1

1.0 Introduction.. 1

1.1 Historical Background of the Nigerian Stock Exchange. 3

1.2 Statement of the Problem.. 6

1.3 Objective of the Study. 7

1.4 Significance of Study. 8

1.5 Statement of Hypothesis. 8

1.6 Scope of Study. 9

1.7 Limitation of the Study. 9

1.8 Plan of Study. 10

1.9 Definition of Terms. 11

CHAPTER TWO.. 14

2.0 Introduction.. 14

2.1 Classification of the Nigerian Stock Exchange Market15

2.2 Membership of the Nigerian Stock Exchange. 18

2.3 Functions of the Nigerian Stock Exchange. 22

2.4 Dealers in the Nigerian Stock Exchange. 24

2.5 Dealing Procedure. 25

2.6 Instruments used in the Conduct of Operations. 27

2.7 Listing Requirement31

2.8 Problems of the Nigerian Stock Exchange. 34

2.9 Challenges Faced by the Nigerian Stock Exchange NSE37

2.10 Prospects of the Nigerian Stock Exchange. 39

CHAPTER THREE.. 42

3.0 Research Methodology. 42

3.1 Area of Study. 42

3.2 The Research Process. 42

3.3 Sources of Data Collection.. 43

3.4 Research Instrument44

3.5 Measurement of Variables. 44

3.6 Data Analysis Techniques. 44

CHAPTER FOUR.. 46

Data Presentation, Analysis and Interpretation.. 46

4.0 Introduction.. 46

4.1 The Nigeria Stock Exchange: All Shares Index 1995200246

4.2 The Nigeria Stock Exchange: All Shares Index Percentage Change 1994200247

4.3 Operation Highlights of the Stock Market 1995200249

4.4 Nigeria Stock Exchange: Operational Highlights Percentage Change 1995200250

4.5 Market Capitalisation and Gross Domestic Product 1994200251

4.6 Test of Hypothesis. 52

4.7 CoEfficient Correlation of Market Capitalization and GDP Gross Domestic Product53

4.8 Interpretation of Result54

CHAPTER FIVE.. 56

5.0 Summary, Conclusion and Recommendation.. 56

5.1 Summary. 56

5.2 Conclusion.. 57

5.3 Recommendation.. 58

Bibliography. 60

ABSTRACT

The Nigeria Stock Exchange NSE is the centre point of the Nigeria Capital Market, while the Securities and Exchange Commission SEC serves as the apex regulatory body. There are other regulatory bodies of the Nigerian Capital Market. They are the Federal Ministry of Finance, the Central Bank of Nigeria CBN and the Merchant Banks. The Nigerian Stock Exchange provides a mechanism for mobilising private and public savings and makes such funds available for productive purposes. There is what appears to be the general opinion that, a vibrant Capital Market contributes immensely to the economic growth and development of any nation. Nigerian Stock Exchange market has a role to play through a periodic performance evaluation of quoted companies for adequate and efficient generation of income. When income increases, there will be enough to plough back into the business by way of retained profit for business expansion; expansion will equally lead to employment of more hands, thereby reducing the unemployment rate. Also high profit will lead to increased tax liability for infrastructural development. The study attempts to analyse and measure the rate of the economic development of the country through quoted companys level of capitalisation, value indices of common stocks, growth in the number of listed securities and Gross Domestic Product. The study will also analyse the operation of the Nigerian Stock Exchange, its challenges and prospects, the functions and dealers in the Nigeria Stock Exchange market. The study suggests that, the system should be liberalised so that expected result of capital reform would not be distorted by inefficiencies in the financial sector.