ABSTRACT
Most developing nations use its capital market to boost its economy as it helps the economy grow. The Nigerian capital market has its key instruments established in 1959 when measures to operationally it started.
The Nigerian Securities and Exchange commission is the Apex regulatory authority of the capital market and the Nigerian Stock Exchange is the body organizing Security dealers and brokers. However, we shall endeavor to critically examine the capital market and its effect in the Nigerian Economy through the NSEC, NSE and these stock broking firms.
Initially, when the Capital Market was established in Nigeria the activities of which they were involved was hardly known, people were not investing, some did not even known about its existence. But in recent years, the Capital Markets has been experiencing a continuous tremendous growth and however increasing the overall Gross Domestic Product Over the Years. The Nigerian Capital Market has so much tasks ahead of them because of the present education people have about it  thereby increasing investors. Provisions will have to be made so as to in crease the Capital Market, Monitor the activities
CHAPTER ONE
INTRODUCTION
1.1 THE BACKGROUND OF THE STUDY
The capital market is a highly specialized organized market for long term funds and securities. It provides services that are essential to the modern economy through its ability to facilitate trade and therefore production which offers access to a variety of financial instruments that enable economic agent to pull, price and exchange risk. This market which is used for raising and investing long term funds with its maturity fperiod ranging from 10 years and above have financial instruments such as equity securities, preference shares and loan stocks.
To an extent, a positive relationship between capital accumulation and real economic growth, has long been affirmed in the accumulation and mobilization for developed varies among nations but it is largely dependent on domestic savings and in flow of foreign capital. Therefore, to arrest the menace of current economic predicaments, efforts must be geared towards effective resources allocation. It is in the realization of this, that consideration is given to measure for
the development of the capital market as a source of finance for economic development.
The development of the capital market in Nigeria has been fostered and indirect by the government, as in some other developing countries. Though prior to the establishment of a stock exchange market in Nigerian, there existed some less formal market arrangement of the operation of a capital market which was not provided until in 1959, Mr. J.B Loynesion at the invitation of federal government to give advice on what role the Central Bank would play in the development of a local money and capital market.
With the establishment of the Central Bank of Nigeria in
1959, the Lagos Stock Exchange in 1961 and subsequently, the Nigerian Stock Exchange commission by an act in 1979, a solid foundation has been laid for the operations of the Nigerian capital market for trading securities of long term nature needed for the financing of the industrial sector and the economy at large.
Undoubtedly, there are potential investible funds abound in Nigeria, but the overriding consideration in the essays will
be to examine the capital market and the market mobilizes all the resources to generate economic development. Some other operations in the Nigerian financial system consists of the following:
a. Insurance companies and providents funds (Trust fund)
b. The Central Bank of Nigeria and the commercial bank under the banking system.
c. The savings institutions e.g. federal savings bank and
People Bank of Nigeria. d. The public sector etc.
The above mentioned are some of the sectors that comprise of the financial markets. The purpose of studying the capital market basically has to do with the need of appreciation the growth necessity to stimulate industrial development through finances provided for long-term instruments by an organized capital market and to mobilize the investible financial resources for this purpose.
Furthermore, the study will attempt to appraise the role of the capital market in order to ameliorate some problems, like the Nigerian investor seeking financial assistance for
industrial project from the short term liquidity procured from the money market. This undermines the development of the industrial sector since considerable investible funds are unexploited. The study is also necessary so as to investigate the efforts being made to increase the capital market.
1.2 STATEMENT OF PROBLEMS
To a considerable amount, aside the social and institutional factors inability the economic development process in Nigeria, the bottleneck created by the death of finance to the economy constitutes yet a major set back to its development.
It is also possible to recognize that the market institutions and instruments comprising the system seldom facilitate the efficient production of goals and services for the well being of the society as well as perform an economic function of facilitating the transfer of real economic resources for lenders (savers) to the borrowers (investors).
To this end, the study will attempt the examination of various instruments, which have been employed to help solve
the problem of liquidity in the economy, the tractable problem of capital formation and that of funds mobilization for investments.
Therefore, we shall examines:
i. If the federation of international stock exchange recommendations of clearing and settlement is being implements?
ii. How effective will the Central Securities Clearing System
(SCE) boost its market capitalization?
iii. Whether the master policy issues and approaches of the various institutions constituting the capital market, fostering a well developed capital market.
1.3 OBJECTIVES OF THE STUDY
i. Ascertain whether market capitalization has a significant effect on the economic growth.
ii. Ascertain whether development stock have significant effect of the economic growth.
1.4 RESEARCH QUESTIONS
i. To what extent will market capitalization have a significant impact on the economic growth.
ii. Is development stock significant effect on the economic growth.
1.5 RESEARCH HYPOTHESES
The following are our hypotheses for the study
HoI: Market capitalization does not have a significant positive impact on the economic growth.
Ho2: Development stock do not have a significant positive impact of the economic growth.
1.6 SCOPE OF THE STUDY
The scope of this study is strictly restricted to the Lagos and Onitsha offices of the Nigeria Stock exchange and the Nigerian Securities and Exchange Commission respectively. A broad view of the role of Nigerian stock exchange will be given in relation to its role as a cornerstone of the nation’s capital market. Reference will also be given to the exchange role
economic institution in the on going development process in
Nigeria.
A lot of difficulties were encountered in obtaining the information needed for this study. The limitations of the study includes unavailability of materials and hoarding of information by some members of staff of some companies. It should also be noted that this study will not deal with any thing that lies within the boundaries of traditional investment analysis.
1.7 SIGNIFICANCE OF THE STUDY
The significance of the study to accounting cannot be over-emphasized. This study will seek to access the level of subscription to public issues, review the performance of government enterprise and private enterprise and private enterprise through public offerings and examine the performance of equities in the Nigerian stock exchange.
It will contribute to the knowledge of these seeking to invest in the capital market. It is hoped that this work will make reasonable contributions to the stocks of literature on
the subjective and it will help students who have writing similar topic.
1.8 OPERATIONAL OF TERMS Investment Trust
This is a limited liability company which uses funds by shareholders to construct a port folio of securities that will earn good income and enjoy long-term capital growth.
Unit Trust
This pools funds of small investors and professional manages it by investing in securities for the benefits of unit holders. The UNIT TRUST is especially designed to attract the savings of small investors.
Warrant
A warrant is a bond that gives the holder the opportunity to buy the shares of issuing at a specific period.
Right Issues
This is an offer to existing shareholders to enable them subscribe to additional share in proportion to their existing holdings. A right issues can only be used by companies quoted on the stock exchange. No prospect is required and the issue will often not be written in a right issue.
Initially, when the Capital Market was established in Nigeria the activities of which they were involved was hardly known, people were not investing, some did not even known about its existence. But in recent years, the Capital Markets has been experiencing a continuous tremendous growth and however increasing the overall Gross Domestic Product Over the Years. The Nigerian Capital Market has so much tasks ahead of them because of the present education people have about it  thereby increasing investors. Provisions will have to be made so as to in crease the Capital Market, Monitor the activities of NSE, NSEC, and the Stock broking firms.  This is because the more people learn  about the  capital market and the  returns as regards investing there, the more they would want to invest in the capital market.
Conclusively, the importance and significance of the capital market in Nigeria cannot be over-emphasized. This is because in recent years, the Nigerian Capital Market has Continued to experience an increase in its turnover there by providing employment, occupation,  job  satisfaction,  growth  in companies, amongst so many others and finally, helping Nigeria grow.
This material content is developed to serve as a GUIDE for students to conduct academic research
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