CAPITAL MARKET STRUCTURE AND DEVELOPMENT (A CASE STUDY OF NIGERIA STOCK EXCHANGE NSE)

CAPITAL MARKET STRUCTURE AND DEVELOPMENT (A CASE STUDY OF NIGERIA STOCK EXCHANGE NSE)

Chapter one

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The Nigerian capital market is a long term end of the Nigeria financial system just as the money market is its short-termed in other words, the capital market performs for the economy, at the long-term end, the functions which the money market does at the short-term end of the spectrum.

Thus, while those who are short of funds and need to borrow for the short term suggest borrowing from the money market, those who are short of funds and want to borrow for the long term go to the capital market.

Similarly, those who have funds in excess of their immediate needs and want to lend or invest them for short durations do so in the money market, whereas those who have such funds and want to lend them for long periods invest or lend them in the capital market.

The regulation of financial markets and the emancipation of economies’ capital flows in certain African countries create a number of difficult concerns. Policymakers and practitioners are concerned and involved in these issues.

A wide range of challenges impact the establishment and design of capital market operations (trading structures). This applies the capital market building philosophy, the role of the capital market (stock) market in achieving overall financial objectives (auctions and dealerships), the choice of the relative competitiveness of emerging stock markets, and the connections between innovative trading and global market regulations.

1.2 Statement of the Problem

The Nigerian stock exchange has witnessed a remarkable transformation throughout the years. The Nigerian stock exchange has been around for about 38 years, which is long enough to allow for a thorough examination of its structure and growth.

The stock exchange has been around long enough to allow for a thorough examination of its structure and growth. The stock exchange or its establishment was expected to provide appropriate machinery to facilitate further offerings of stock and shares to the general public in the private sector of the economy, as well as to encourage savings investment as soon as it became clear that stocks and shares were readily available.

However, most countries’ experience during the 1980s has erased any doubts about the necessity of domestic capital markets in supporting balanced economic growth. The recurrent difficulties of national and corporate debt have led to the folly of mixing too much short-term with too little long-term capital.

The Nigerian capital market has not been as “smooth” as it was envisioned when it was established. There are some constraints in this area. Some economists say that Nigeria’s capital market is underdeveloped and has not grown significantly since independence.

And that shares are infrequently traded, and prices do not represent the trading characteristics of the listed companies. The Nigerian capital market may struggle to properly and efficiently build its market structure due to its high workload.

1.3 GOALS OF THE STUDY

This study effort aims to highlight Nigeria’s capital market structure and development. It looks at the capital market operations, the important participants in the Nigeria capital market and to assess the capital market structure in assisting the development of the Nigerian economy.

In view of this, capital market operations, the necessity for stock exhcnage and the Nigerian capital make and capital structure and development comprehensively dealt with for analytic purpose.

1.4 Significance of the Study

This study will educate and expose ignorant businessmen and students to the operations of the NSE, thereby broadening the horizon of knowledge of the general public, particularly the operations and policymakers of the capital market recommendations, which will in no small measure serve as a guide to improved performance.