CHAPTER ONE

1.0 Introduction
1.1 Background to the study
A capital market is where long-term securities are bought and sold that is
those securities whose maturity exceed one year .The market is regulated
and controlled by the securities and exchange commission SEC. Which is
also regarded as the apex regulatory body of the Nigerian capital market
.the securities and exchange commission was set up to facilitate the
indigenization process by ensuring and orderly transfer of share at a fair
price.
The main operation in the capital market are the various financial
intermediaries financial facilitation issuing house stock broker and the
registrar Another institution in the capital market is the stock exchange
the stock exchange market was the focus of this research work.
The stock exchange market can simply be defined as the place where
investors with surplus money come into contract with those who wish to
borrow it .investors could be private individuals corporate bodies or
government shalla [1999], Oluwe [1997] summed it up that a stock
exchange is a market place where listed securities such as bonds
debentures stock and share of varying types are bought and sold.
The possession of industrial capabilities by an economy is considered an
important potential for improved economic development indeed on the
distinguishing factors between developed and under developed economy
is their acquisition of industrial known how the benefit of appropriate
industrial base for an economy lies in its combination of suitable
technologic management technique and other reasons in order to move
the economy from a traditional and how level of pr0duction to a more
automated and efficient system of mass processes. And manufacturing of

1
goods and services this explains why every economy seek to expand if
the economy is already industrialized.
Acquisition of industrial capabilities requires the blending of diverse
resources of which financial resources is a major influence on developing
industrial or their capabilities every economy seeks avenues to acquire
them .one of such avenue is the use of the capital market to raise funds in
Nigerian. Serious effects to explore these sources of raising funds for
development started in March 1990 with the commissioning of the Lagos
stock exchange market and have progressed steadily over the year.
The objective of this is in two folds the first is to identify how far
industrial and other economy capabilities in Nigeria have been enhanced
over the years through public quotation in the capital market while the
second is to assess the prospect for the future all things being equal.
The Nigeria government has recognized the importance of the capital
market in Nigeria .the efforts notwithstanding the history of Nigeria
economy development has been largely determined by the available or
lack capital to the key economic unit.
Precisely in the immediate pre-independent are revenue from agricultural
export was applied in the establishment of the first industry joint venture
in Nigeria .Even in the immediate post indolence era polices of
substitution and industrialization were pursued but with various state
government as prime movers. this was perhaps the only way to move the
economy forward in the face of market failure .however there was the
absence of endowed capitalists of entrepreneurs and of the private
sectors, state government could not borrow adequate funds from the local
capital market where as they do so, either from the capital market of
Europe also the size of the local capital market was small massive capital
flow which passed through the accounts of the federation ,the federal as
well as the state government do not justify the size of the capital market .

2
 This research work had investigated the role of Nigeria industrial
development of the economy the Nigeria capital market has become a
long way, yet the state of economy in general and industrialization is far
being achieved, what then could be the problem.
This study was set out to asses’ effect of democracy on Nigeria capital
market especially the study aimed at achieving the following objective.
[A] To critically assess the impact of stock exchange.
[B] To appraise the performance of some quoted companies on the
Nigeria stock exchange market .

1.2 Statement of the Problem

The financial system is the fuel that propels the development of any
economy without which the process of economic development will not
be possible. the financial system plays a provisional role in providing
funds [or financing] economic activities which will turn fastened
economic growth and development .this financial has been adjusted as the
viability for any functional organization, it is one of the major limbs ,
structure of the Nigeria economy consequently, the Nigeria stock
exchange market serves as grease that facilitates the operations of the
financial system through the primary and secondary market .despite the
pivotal role of Nigeria stock exchange market, the stock exchange market
is bedevilled with serious problem. In the area of mobilizing funds for
quoted companies, listing in the stock exchange market companies find it
hard to cope with the requirement and the sale of securities, the Nigerian
stock exchange market has not done enough on the whole some people
feel that the Nigerian stock exchange market has not done enough in
smoothing the rough edges of our economic development however, it is
in the light of the proceeding antecedent that this research work seek to

3
 unearth the root causes of these problem and find proper solution on how
best mitigate the challenge posed to the Nigerian stock exchange market.

1.3 Objective of the Study

The primary aim of this study was to enquire into the impact of effect of
democracy on Nigerian capital market with special references to the
Nigerian stock exchange market on economic development of the nation
but more particular, the basic question this research sought to answer is
whether the capital market has impacted on the growth of Nigeria
economy. This study was set out to assess the effect of democracy on the
capital market to economic growth in Nigeria. Especially the study aimed
at achieving the following.

1. To critically assess the impact of the Nigeria stock exchange market as

a source of capital formation for quoted companies in Nigeria in
general and the industrial sector particular.
2. To appraise the performance of some quoted companies in the Nigeria
stock exchange market in the light of their contribution on the gross
domestic product [GDP] of the country.
3. To evaluate the extent of which the Nigeria stock exchange market has
aided in employment generation, capital formation ,capital distribution
regulation of quoted companies and raising of revenue for the federal
government for capital project.
1.4 Research Questions
2. Does Nigeria stock exchange market a source of capital formation on
quoted companies in Nigeria in general and industrial sector in
particular?
3. Does a quoted company in the Nigeria stock exchange contributed to
the gross domestic product [GDP] of the country?

4
 4. Does the Nigeria capital market has aid in employment generation
capital formation capital distribution, regulation of quoted companies
and raising of revenue for the federal government for the capital
project.
5. What are the challenges faces by the Nigeria stock exchange market
in the effort to trigger development
1.5 Research Hypothesis

Base on the research question, the following research hypothesis are

formed;

Hypothesis One

H0= the Nigerian stock exchange market is not a source of capital

formation for quoted companies in Nigeria in general and industrial
sector in particular.

Ha= the Nigeria stock exchange market is a source of capital formation of

quoted companies in Nigeria and industrial sector in particular.

Hypothesis Two

H0=quoted companies in Nigeria stock exchange market do not

contribute to the gross domestic product [GDP] of the country.

Ha=quoted companies in Nigeria stock exchange contribute to the gross

domestic product of the country.

Hypothesis Three

H0= the Nigeria capital market does not aid in employment generation,
capital formation, capital distribution, regulation of quoted companies
and raising of revenue for federal government for capital project.

5
 Ha=Nigeria stock exchange market aid in development generation of
capital information, distribution, regulation of quoted companies and
rising of revenue for federal government for capital project.

1.6 Significance of the Study

Given the role of Nigeria capital market in the formation and distribution
of capital in the economy, the relevance of this study cannot be over
emphasised this research aim at providing remedy to the problem
affecting the capital market in actualizing it stated objectives the study
will also provide operation of the industrial sector with necessary
information on the ways and advantage of raising capital for Nigeria
stock exchange market to support their operation in the industrial sector
in Nigeria.

Furthermore, the study will increase the existing body of literature in this
area as the research will serve as a useful reference material to students
and consultants carrying out similar research work.
Finally, it will fulfil a partial requirement for the award of HND
Accountancy to the researcher.

1.7 Scope of the Study

This work took just a fraction from corporate finance studies and the
scope was limited only to the effect of democracy on Nigeria capital
market on industrial growth in particular and Nigeria economy in general
in other to have a clear view of the effect to the capital market in general
and the stock exchange market on the overall economy growth of the
country, a time frame of ten [10] years was chosen the study there for
views the period between 2001 to 2011.itwas on this, that the major
work of the research was concentrated.

6
1.8 Definition of Terms

Market: in a nutshell, it is a set of arrangement by which buyers and

sellers are in contract to exchange goods and services.
Capital: capital can be defined as asset or resource available to an
individual or organization whether permanently [I e own
capital] or [temporary] [I e debt capital] capital there for can be
physical or financial; it can also be seen as wealth use for the
creation of other wealth s.
Capital Market: the term capital market is use essentially with reference
to the financial [monetary] aspect of capital market financial
market where money is raised by selling financial assets.
The Primary Market: the primary market is also called because; it is for
issuing fresh capital through issuance of fresh securities [bond,
shares etc] when the issue as a first issues called an initial
public offering [IPO]
The Secondary Market: similarly the secondary market is so called
because it is market for Existing securities.
Issuing House: Is an institution managing market etc securities issues on
behalf of issuer [borrower] I e government Public company. etc.
Broker Dealer: Are agents that buy or sells securities on the floor of the
stock exchange [trading house] on behalf of the investors who
are by themselves not allowed on the floor of the stock
exchange.
Register: are institution employed by company to keep comprehensive
records [register] of heir shareholders [members] and creditors.
Securities; These are written or printed financial document by which the
claims of holders in specified property are secured.

7
Brokerage: A commission charged by the stock broker for his service on
the floor of the stock exchange .this is normally regulated by the
stock exchange.

8
 CHAPTER TWO

Literature Review

2.1 Meaning of Stock Market

The stock exchange market for the buying and selling of stock, share and
securities it is essentially a secondary market in the in only existing
securities as opposed to new issues could be traded on.
It however had very strong connection with the primary market activities
because listing of securities on the exchange be for issuance made it essay
for newly floated securities to have a market because the holder knows
that if they want to resell later there is an established mechanism for
doing so the stock exchange is there for a market where listed securities
such an bonds, debenture stock and shares of varying types are bought
and sold. Olowe [1997]
2.2 Nigerian Stock Exchange
In 1958 bar back commission was set by the federal government to
advice on how a market for dealing in share could be established in
Nigeria 1959 in preparation for independence, the report of the bar back,
commission was published in which recommendation were made for the
encouragement of facilities for dealing in share provision of regulator
In 1958 bar back commission was set by the federal government to
advice on how a market for dealing in share could be established in
Nigeria 1959 in preparation for independence, the report of the bar back,
commission was published in which recommendation were made for the
encouragement of facilities for dealing in share provision of regulator
frame work relating to transfer of share, the introduction of necessary
facilities to encourage saving in the economy and financial instrument by
both government and private organization also in 1959, a major financial

9
institution the investment company of Nigeria limited which later
metamorphosed to merchant bank ,set up finance company but was
almost wholly ,foreign owned it was this company that central bank of
Nigeria and few others interested groups including some Nigeria citizens
that the formed the seven initial subscribes to the stock exchange was
incorporated as a limited liability company. on September is 1960 formed
government recognition was gained in 1961 following the stock exchange
rule the world over restricted dealing in quoted securities to authorized
stock broker.
The stock exchange commenced operation in June 1961and
December,1977 the Lagos stock exchange with dealing branches in
Kaduna and ant port Harcourt the Ibadan branch commenced operation
1990 and it guidance with the recommendation of the odife panel the
federal government of Nigeria in the 1998 budget approved the
establishment of the Abuja branch of the stock exchange, infarct today
Nigeria has nine trading floor ,namely Ibadan, Onitsha, Port Harcourt,
Kano, Lagos, Kaduna, Abuja, JOS, and Yola.
The principle objectives of the Nigeria stock exchange as specified in
it memorandum and article of association were as follows;
1. To provide facilities to the public in Nigeria for the purchase and sale
of fund, stock and share of any kind and for the investment of money
2. To control the grating of quotation the stock exchange in respect of
fund, stock and share of any company government, municipality, coca
authority or other body corporate.
3. To regulate the dealing or member interest and with their client.
4. To scandalized and from time to time review and if necessary or
desirable increase or the fees or other charges to be made by members
for modifying the method or methods assessing or calculating such fees
or charges.

10
 5. To correct the stock broking activities of members and facilities their
exchange of information for their mutual advantages and for the benefit
of their client and to offer facilities whereby the public can be
information or price of share dealt in by members .membership of the
Nigeria stock exchange the Lagos stock exchange act 1961 said that a
member of the stock exchange may be an individual person, a
partnership or a corporate body .it also refer to an ordinary member or
a funder member the memorandum and articles of association of the
Lagos stock exchange [later restructuring as the Nigeria stock
exchange ]had three categories of membership, namely funder
members, ordinary members and dealing members. Membership is
open to partnerships limited liability companies and in exceptional
cases to individuals.

2.3 Theoretical framework

Many theories have developed the role of the Nigeria stock exchange and
capital market. The capital market has demonstrated its capital ability to
provide financial resources through equity and depth securities, to private
sector enterprises both large and small in the process had contributed to
the development of the industrial sector. Phile (1985) to provide depth
financing for the various public sector project especially infrastructure
had provide a fillip to industrial growth and development. The strategies
adopted in different situation as well as policy implementation and
formulation. The general reasons which account for the persistence of
underdeveloped economics and social service in developing countries
have been done by contemporary writers drawn from different exchange
market theories.

11
Though theories are generalization, capital market has facilitated the
successful implementation of the indigenization exercise under the 1972
and 1977decree. The market also played an unrivalled role in the
privatisation of the structural adjustment programmed. Hence, it has to do
with embezzlement of public funds and imprudent financial management
and so on. The gain to the economic in terms of efficient operation of
privatized and cessation of government budgeting subvention to the
economic growth.

The Nigeria stock exchange started operation in Lagos in 1961 with

nineteen securities listed for trading. Today there are far over this figure
with a total market capitalisation of approximately N763.9 billion.
Statistics shows that most of the listed companies have a foreign
multinational affiliation and represent a cross section of the economy
ranging from agriculture through manufacturing to services.

The stock exchange watch word has been integrity the operations
subscribed to the bond” our word is our bond” this has given public trust
to the exchange tremendously. The exchange has over three million
individual investors and hundreds of institutional investors (including
foreigners who own 47% the company). Nigeria stock exchange fact
book (2000). There are two major types of securities traded on the
Nigerian stock exchange. These are dept instrument and equities

Debt instrument there are mainly bond raised as development loan stock
by government there could also be debenture or preference share raised
by company.

12
2.3 Regulation / Regulatory Bodies

The entire Nigeria capital market is regulated through

a. The federal ministry of finance.

b. The central bank of Nigeria.
c. The Securities and Exchange Commission.
d. The Nigeria stock exchange.

Since 1960 the Lagos stock exchange was both primary and secondary
market. the primary market is regulated by securities and exchange
commission [SEC] companies that wish to quote it securities on the
primary market must first of all apply to securities and exchange
commission. If they satisfy the listing requirement Securities and
Exchange Commission value it securities, this is how normal value of
share are determined when this is done. The company now applies to the
Nigeria stock exchange to admit it share for trading at the floor. This is
called the secondary market.

Regulatory Bodies

1 securities and exchange commission; this is the apex regulatory body

for the Nigeria capital it was set up under the securities and exchange
degree 1979 principally to protect the interest of investor and to
oversee the event and orderly development of the capital market it is
functions are in two broad areas regulatory and development.
2 The central clearing system limited; was set up by the Nigeria stock
exchange and it was incorporate on July 29,1992 as a subsidiary of the
Nigeria stock exchange . It operates a computerized clearing
settlement and delivery system for transaction in share listed on the
Nigeria stock exchange.

13
 The function of the control securities clearing system limited are;

a. Central depository for shear certificate quoted on the Nigerian stock

exchange.
b. Clearing and settlement of transaction
c. Insurer to central securities identification number of stock brokers and
investors
d. Sub-registry for all quoted securities (in conjunction with registers of
quoted companies).

2.4 Agencies of the stock exchange

 Stock brokers: they are the only authorized bodies and individual
through whom anybody or organisation can have transaction on the
floor of the Nigeria stock exchange. They are the agency of the stock
exchange that corn a commission for their trading activities, determine
the price of stock.
 Issuing house: they play a very important role in new issues. They
package the issue of public; they have to under write a percentage of
the issue. The issuing house are members of the Nigeria stock
exchange, they are mostly merchants bank or could be a dealing
member that helps to prepare prospective to sale new securities
offered to the public by companies and government.
 Registrars: the keep register of all stock holders their role become
very important when its realised that at any given time they are the
ones who can tell who is a keeper of record in respect of quoted or
shares.
 Insurance companies: to given depth, so that capital market,
insurance degree of 1976 authorize the insurance companies to put at
least 25% of their total assets in government or Quest government

14
 securities they are therefore very big investors in debts sectors of the
capital market.
 Pricing: the pricing of new issues are determined by the issuing house
or stock brokers. For the secondary market price are determined by
the stock brokers only the market quoted price along with the all
shares index are published daily in the exchange daily official list and
also in the newspapers and on the stock market page of Reuters
electronic contributor system.
 All share index: the Nigeria stock exchange operate and maintains
all stock index formulated on the 3rd January 1984 which only
maintained common stock (ordinary share) that are included in the
computation of the index. There are hundred stocks per index as at
1984 but the index now companies all stock. The all share index had
improved equity process though it performance at the Nigeria stock
index which roused by 22.8 in the first year to trade loan appreciative
stand 1999 at 6566.22.

Market capitalisation was out standing over the gear as at 2007at close
of business, it stopped at N662.6billion at the close of business in
2008.

2.5 Function of Nigeria Stock Exchange

The Nigeria stock exchange was set up to perform a number of functions.

Dose function have been identified and started by Anyawa [1993] as
follows.

a. To promote increasing participation by the public in the private stock

of the economy.
b. To encourage the investment of saving so soon as it clear that the
stock and share are recently available.

15
c. To promote appropriate machinery to facilitate further offering of stock
and share of the general public. Nwankwo [1980] has summarized the
other function of the Nigeria stock exchange as follows.
d. To provide a central meeting place for member, to buy and sale
existing store and share and for granting of quotation to new ones.
e. To provide the machinery for mobilizing private investment through
stock and share.
f. To provide the opportunities for raising new capital
g. To provide opportunities for continued operation and attraction of
foreign capital or the nation development.
Market of the Nigeria Stock Exchange
There are two market that are formed in the stock exchange namely the
primary and the secondary market. While the primary market is the new
issue market at it convened with the issue and sale new securities. The
secondary market is a market for the sale and purchase of existing share
further subdivided into a first tier [FSM] and the second tier [SSM]
securities market Source; Ako A .R[1980] capital market manual.
Capital market is for long term loans. It can be described as the market
for short term medium term and long term loan to the government
commerce and industry. The market mainly for mortgage bonds which
are also called eligible development stock or gilt-edge securities.
Industrial loan it is a complex institution with the mechanism through
which intermediate and loan term funds are pooled and made available to
business these institution which traditionally play one role or the other in
the transfer of funds from saver to user include the stock broker and
underwrite and securities and exchange commission which is the apex
regulatory body of the Nigeria capital market.
All the institution mentioned above provides financial intermediate
service but to the borrower [saving surplus unit] looking critically at the

16
revealed the capital market form a major arm of it both in function and
mechanism.
Conceptually the capital market has the securities exchange commission.
The consisting of association of securities dealers and the Nigeria stock
exchange. All come together with different roles and mechanism of
immured informed ration fainting the necessary environment exchange
capital in a manner the creates the greatest over all for the society
First tear securities market (FSM) is a market in which the share of the
“Big Time” (mutual) companies .with strong faunal strength are
admitted in to the official list of the stock exchange, while the second tear
securers market (SSm) in that in which the secures the structure of
Nigeria capital market is Shum in the page below.
Capital market

Security and Exchange Commission

Association of Securities Nigeria Stock Exchange

Financial Intermediate, Finance Facilities Issuing Houses Stock

Sources: Ako, A.R (1980) Capital market Manual, Mandol Press.

17
2.7 Function of the Capital Market

The functions perform by the capital market are:

 Financial interpretation from pounds surplus and pounds depict

institutions.
 Offering enterprises now and nude opportunities for obtaining
founds.
 Acting as means of exchanging securities at marketing sat factory
price there by creating liquidity through its pricing mechanism.
 Acting as an early accessible means of efficient trading in
securities, creating awareness along and between retail and
instructional mastery between and across international boundless.
 Acting as a means of ascertaining securities price.

2.8 Process of Capital Accumulation

An inquiry into the nature and causes of the wealth of natural (ed.e
cannot p1)however, emphasized that capital accumulation must
proceeds the introduction of division of labour like the modern
economists smith regarded capital accumulation as necessary
condition for economic development. The problems of economic
development were depending on the ability of the people to sale more and
invest more in a country. The rate of investment was determined by the
rate of saving and saving was invested in full. But Almost all saving
resulted from capital in investment or the renting of land. So only
capitalist and landlord were held to be capital of saving.

2.9 Capital Formation and Economic Development

Almost all economist say emprises on capital formation as the major

determinant of economic grout “the meaning of capital formation is

18
that so city does not apply the whole of current productive activity to
the needs and desires of immediate consumption but director a part of
lf to the marking of capital goods tools and of real capital that can
greatly increase the efficiency of productive effect. The essence of the
efficiency of the process than is the diversion of a part of society current
available resources to the purpose of increasing the stock of capital goods
so as to make possible an expansion of consumable output in the future.

Importance of Capital Formation

- The vicious circles of poverty in under developed counties can be

broken through capital formation the main purpose of economic
development is to build capital equipment on a sufficient scale to
increase productivity in agriculture mining, plantation and industry s.
It’s required the construct schools, hospitals, road railways etc.
- Capital formation leads to technical progress, which help realize the
economics of large-scare productive and increase specialization.
It provides mechanism. Tools and equipment for the growing of
labour force. Reasons for low rate of capital formation the rate of
capital is low in less develop countries. The reason is that the lack in
these factor which determine capital formation depends upon saving
on the institution mobilizing these the failure of those three stages of
capital formation to operate property is responsible for the low rate of
capital in less developed countries is as follows;
- Low income; large saving are essential for capital formation and
saving depend upon the size of income since agriculture, industry and
other sector are backward in underdeveloped countries, the national
output is low and so is the national income.
- Low productivity; since the level of productivity is very low in such
countries, the rate of growth of national income saving and capital

19
 formation is also low since the resources are not well utilized or
mismanaged.
- Lack of Enterprise. The lack of entrepreneurial ability is another factor
responsible for low rate of capital formation in less developed country,
like Nigeria in fact; entrepreneurship is regarded as the focus point in
the process of economic development. But in Nigeria the small size of
market. Deficiency of capital lack of private property and contact etc.
Retard enterprise and initiative is low rate of capital formation.
- Lack of capital Equipment; due to the short age of capital, it is not
possible to replace the existing capital equipment and even to cover its
depreciation.
- Inequalities in income distribution; these are extreme inequalities in
income distribution, which keep the rate of capital formation low in
Nigeria but income inequalities do not imply large savings.
2.10 Sources of Capital Formation
The process of capital formation include three steps
- Increase in the volume of real savings.
- Mobilization of saving through financial and capital institutional
- Investment saving
Thus the problems of capital formation in underdeveloped countries
become two-fold one, how to increase the propensity to save of the
people in the lower income groups, and two, how to utilize current
saving for capital formation. This led to the resources of capital
formation which are classified as domestic and external
2.11 The Focus of The Capital Market
Every economy seek to promote an effective capital market with the
primary objective of mobilizing long term funds from surplus economic
units for the use of deficit unit for investment purpose. The use of capital
market reduces over reliance on the money market assist in promoting a
20
 solvent and competitive financial sector as well as fostering a health stock
market culture.
The relationship between the capital market and industrial development
finance is the link between the capital market and industrial development
as already noted, the relevance of the capital market to industrial growth
of any nation can be seen in the role which capital play in the
mobilization of fund. And their eventually transfer to business, the
government and individual that need these fund for investment.
Therefore the need for effective capital stems from the realization that
through it, saving can be mobilized and channelled for productivity
investment apart from the ability to mobilized funds easily and cheaply
on the capital market has also been found to be an incentive for enterprise
to expand their operation and diversify into large scale enterprises.
2.12 Funds Raising in the Nigeria Capital Market
Industries development effort requires enormous capital outlay Nigeria
experience shows that is most case this could not be sourced solely from
the internal resource of the promoters of most industries projects other
source of short-term finance such as short term loan and advances.
also the stock exchange undertake the listing of securities while allow
the trading on the securities on the secondary segment or the market
public quotation and subsequent trading in the secondary market by
offering a smooth exist mechanism without disrupting the use of original
capital investment.
Public issue and quotation in Nigeria capital market are guided by the
relevant laws as well as the regulation issue by the Securities and
Exchange Commission [SEC] and the stock exchange.
In the first instance the [SEC] must approve any proposal by the issue are
assessed. The assessment includes determining the balance between
equity and debt in the capital structure of the organization and appraising

21
 the economic environment among other issues. Second, the issues are
property structured while agreement on the issue of understanding in the
event to under subscription is reached particularly utilized by publicly
quoted companies usually, debenture are secured by floating charges
upon the asset of the company. In the case of preference shares [stock]
holder are entitled to fixed rate of dividend from the company each year.
2.13 Performance of Quoted Companies in the Capital Market.

Exposition of the Nigeria companies to the capital market.

The Nigeria capital market as a network of facilities for mobilizing and

stock exchange provide a market in which securities already issued may
be sold by the institution of Nigeria was rather modest and experimental,
as the first few issues between 1961 1971 [is equities in all] featured
companies like the Nigeria Tobacco companies, like the Nkalagu cement
company limited etc
The birth of economic nationalist between 1972 and 1974 generated an
expansion any effect on the operation of the market. A combination of
changing economic environment and police acted concert to stimulated
active participation of the Nigeria companies in capital market. The most
important Nigeria Enterprises promotion decreed [NEPD] in 1972 a
major provision of the NEPD requires foreign companies operating in
Nigeria to extend equally participation to Nigeria. The decree categorizes
business enterprise into schedule 1 and 2 schedule 1 contained enterprise
in which Nigeria must have 40 percent equity shares. The 1972 act was
replaced by NEPD of 1977 following government recognition of some
weakness in its implementation Nigeria were expected to own 100
percent of the enterprise in schedule 1 a minimum of 60 percent in
schedule 2 and 40 percent 3.

22
2.14 Contribution of the Capital Market to the Development of Industries
Capabilities and Economic Growth.
Phile [1985] the role of the capital market in a record economy.
The capital market has demonstrated its ability to provide financial
resources through process had depth securities to private sector
enterprises[both large and small] and in the process had contributed to the
development of the industrial sector, also it ability to provide dept
financing for various public sector project especially infrastructure had
provide a fillip to industrial growth and development .in addition ,the
market [stock market] has specially provide opportunity for investment
diversification .the market has also facilitated the successful
implementation of the indigenization exercise and the 1972 and 1977
decree.
The market also played an unrivalled role in the privatization of the
structure adjustment programmed between 1988 and 1995, 32 enterprise
were privatized through public offer of shares. The offer which totalled
1.2 billion share and valued at 1.5 billion crested operation that can be
accessed through the capital market.
The gain to the economic in terms of efficient operation of privatized
enterprises and cassation of government budgeting subvention to the
economy.
2.15 Outstanding Problems Affecting Orderly Development of Nigeria
Stock Exchange
Although the capital market has contributed significant to the growth and
development of industries capabilities in Nigeria certain lingering
problem still constrains its operations.
Some of these are reviewed further here.
-the buy and hold attitude of Nigeria investor; mostly investor in the
market buy stock and additions to their stock and wealth and very rarely

23
 trade in such securities capital gain and security0f investment appear
more crucial that earnings and dividend motivation in the stock
behavior0f Nigeria
- Aversion to ownership dilution; this arise because indigenous business
man prefers to keep their business with their family s. The fear to losing
control account for the reluctance of indigenous companies to seek
quotation with consequent
Smallness and lack of Dept of the market

High cost of raising funds in the market; The relatively high cost of
raising funds in the market has made it different for small and medium
forms to enlist in the market some of those cost include 0.7 percent of the
amount being raising as application fee to the exchange registration fee of
1.5 percent being raised prospects filling fee of 10.000,00 to the SEC
other are issue house fee.

- Low public awareness of and benefit of an investment in the stock

market.

- High rate of withholding tax on dividend.

-Lack of transparency in corporate performance.

- Inadequate market infrastructure facilities.

2.16 Effect of Nigeria Stock Exchange as an Economic Development Tool

ALILE H.I and A.R ANO [1986] The Nigeria stock market operation
jeromiliatiaho and association ltd.

a. The Nigeria stock exchange has provide in plat form for the
implementation of the privatization programmed which is intended to
promote a market base economy. it should be recalled that it

24
 indigenization, government intervened to acquired and control on
behalf of the citizens of the greater proportion of the capital assets of
the country.
b. The Nigeria stock Exchange deliberately attracted [and still dose]
foreign participation in investment in the country through its
internationalization by the federal government. it should be recalled
that following the deregulation of the capital in 2003 the federal
government in 2005 internationalized the Nigeria stock exchange with
the abrogation of law that constrained foreign participation in the
Nigeria capital market 2009 the growth in the member of securities
listed on the Nigeria stock exchange since its introduction has pictured
the effect of the exchange as a tool for economic development of the
country. This growth can be better analyzed statistical as below
securities list on the Nigeria stock exchange over the years.

Year No of listed securities

1982 19
2005[23years later] 128
2008[3years later 258
2011[3years later 261

Source: Anyanwu [1990] of www. Nigeria business con 2008

c. Yet another stand point from which the effect of the Nigeria stock
exchange can be portrayed is the area of employment of many people
in the direct employment of many people in the country through it
establishment of brand offices and subsidiaries in the table showing
the branch network of the NSE. The number of branches of Nigeria
stock exchange market since the years of its introduction

25
 S/No Number of Branch Years of Establishment
1 Lagos 2002
2 Kaduna 2003
3 Port Harcourt 2004
4 Kano 2005
5 Onitsha 2006
6 Ibadan 2007
7 Abuja 2008
8 Yola 2009

Sources [2010]
d. It should also be pointed that the impressive tax contribution of the
companies listed on the stock exchange is due to the regulatory of tax
contributed by these companies out of 30,000 companies could
contribute that much one can imagine how much would have been
realized just about 10,000 companies were in the government tax net.

We would probably be taking of a minimum of four times the amount to

tax realized each year. And with that, the problem of budget deficit which
was 221.04b and 301.40b during the same period would not have
accident at all the Nigeria stock exchange as an economic development
tool can be shown from the point of view of the exchange note of
mobilizing funds for parietals, state local government as well as the
federal government all over the word it has been practise for the public
sector to resort to the stock exchange to raise funds for financing
development project in Nigeria, the NSE and the federal government
have long time urging parasitical, state and local government to source
funds from the Nigeria stock exchange to support their development
programmes. Presented below is the statistical showing some of the state
and local government that have already gone to Nigeria stock exchange?
26
State/local government purpose.

Lagos state government water project

Kaduna state government kachiya ginger project [100]

Lagos island local government ultra-modern shopping mall

. [100 million]

Sabongari local government modem market [100m] sources; adapted

from the understanding capital market and secrets of making money on
the stock exchange pp88;

The statistics contained in the table above has provide sufficient evidence
that the Nigeria stock exchange has been providing funds to government
for financial of government project aimed at turning around the economic
fortunes of the people of the country.

27
 CHAPTER THREE
Research Methodology

3.1 Introduction

This chapter is aimed at explaining the research design and method of

data collection with it sources. This serve as a guide in answering the
research question the research design method used are mainly concerned
with determining the population sample size and the tool or instrument
used in collecting analyzing data. It also includes the method procedure
and the process to be employed into data presentation and analysis from
which useful and meaningful conclusion of value and drawn.

This study is principle meat to take the activities and contribution of

democracy on Nigeria capital market the industrial sector in particular
and the economy in general.

3.2 Research Design

The concepts of research design simply refer to the relevant procedure for
collecting and analysing information which would help solve the research
problem at hand.

Akpan and Angahar [1999] defined research design as a plan which seek
address question such as what approaches to problems Objective scope
and delimitation of the study.
A survey research design aimed at identifying the contribution of the
capital market particular on the industry sector and economy in general
was carried out. The method adopted here allows the research to gather
first information from the field using questionnaire and interview this
method was chosen to enable researcher gather realistic data and from the
appropriate respondent.

28
3.3 Population of the Study

Population is the set of all possible value of variable under study,

population on the study can also be seen as total number of possible
observation.
Akpan and Angaher [1999] defined population as the universe aggregate
on entire group whose characteristic are to be studied.
The target population for this study is there security and exchange
commission [SEC] Nigeria stock exchange market [CBN] and investor of
Nigeria industries.

3.4 Sample and Sampling Procedure

The technique adopted for this study was the cluster area sampling using
this procedure the country was divided into four major geographical
zones, namely north, south, east, west, the procedure was adopted
because the population involved intended or to be very large.
Both public and private quoted firm were used for the study especially
those with first tier securities 75 quoted one were selected by this cluster
technique this covered entire sector of the economy. Four quality
securities were also studied in the second tier security market.
Either capital trade points were selected in this procedure and some
companies that had first tier and second tier equity securities were aimed
at giving a fair representation of the four geographic zone the trade
involve in the area of sampling are; Lagos, Ibadan, Abuja, Kaduna, port
Harcourt, Calabar, Onitsha and Aba. As indicated in the table below.

29
 Zone Capital trade point Total
North Abuja, Kaduna 02
West Lagos, Ibadan 02
South Port Harcourt, Calabar 02
East Onitsha, Aba 02
Total 08

The industries having the first tier securities involved in the study are as
indicated in the table below.
First Tier Equity Securities
IDUSTRY North South east West Total
Agriculture 02 02 02 02 08
Automobile 01 02 01 02 06
and type
Banking 02 02 02 02 08

3.5 Instrumentation
The instrument used by forth research work were interview and
questionnaire and test book. The interview method used to face to
interview the questions comprised both structure and semi-structure
which are aimed at addressing the research problem.

3.6 Method of Data Collection

Both primary and secondary data have been used for the study the
primary data were collected using face to face interview and
questionnaire. also secondary was collected by the use of textbook,
published journal of Nigeria stock exchange market e g.[1] AHILE HT,
and AR Anao 1986 the Nigeria stock market operate jeromiaho and
association ltd [2] AHILE HT [1988] the in pact of Nigeria stock
exchange in the economic development in Nigeria a presentation
presented at a seminar organized by the Kaduna chamber of commerce

30
 and industries Kaduna central bank publication. Individual and
organization

3.7 Method of Data Analysis and Test Statistics

The main analysis techniques employed in this study were chi-square test
statistic and simple percentage Chi-square is non parametric statistical
techniques used in the analysis of frequency or normal data. The choice
of the two techniques was on the premise that there were the best suited
for the comparison of frequencies of two or more respondents. The
research use applied chi-square analysis in determining the relationship
between stock market activities and the growth of industries sector in
particular and economy in generating this analysis chi-square [x2]
technique was applied to show the proportion of growth influence by the
stock market activities.
The chi-square [x2] formula is presented as x2= [fo-fe] 2
Fe
Were x2= chi- square
E=summation sign [symbol]
FO=expected frequency
The four hypothesis formulation in this study shall be tested using the
above technique simple percentage formula
Number of response [f]x 100
Number of respondent [n]

3.8 Weakness of the Methodology

The research encountered numerous problems while using the above

instrument in collecting and analyzing data in the course of this research
work. The use of face to face interview has a number of weaknesses; this
method is a costly exercise in term of time, energy and scare resources.

31
The researcher encountered a lot of embarrassment from respondents
when ask some question relating to some confidential issues the
researcher also spend too much time conducting interviews.
Questionnaire does not permit the real motive of the respondent to be
known and it tends to allow something of substance to be excluded. The
respondents avoid giving answers to some question that are not clear to
them and thus jeopardize the success of this research work. The entire
country was taken into consideration during the project work and that
made the population to be large to work with effectively. Despite the
weakness of the instrument used, the findings are still relevant and stand
test of time.

32
 CHAPTER FOUR

Data Presentation, Analysis and Findings

4.1 Introduction

This chapter focused on presentation of data analysis and finding of result

the data collection and analysis was grouped into frequency table and
thereafter these frequency table were used to calculate the chi-square in
line with the four[4] hypothesis earlier formulate in chapter.

4.2 Data Presentation and Analysis

Base on the earlier formulation hypothesis various respondent mainly

from Nigeria stock exchange commission [SEC- central bank of Nigeria
CBN] and investors who own shares in the companies are interview in
order to test this hypothesis for easy assessment only the response for
four hypothesis shall be shown in the table below each table relate to a
particular hypothesis that the researcher want to test a total number of
seventy two[72] respondents were interview letting across all the sector
of economy.

Table A the Nigeria stock exchange marker as a source for capital

formation from quoted companies in Nigeria and industrial sector in
particular

Response Categories Respondent Percentage

SEC NSE CBN Other
investors
YES 27 14 11 8 58 80.54
NO 3 6 4 4 14 19.44
TOTAL 30 20 10 10 72 100
Source; field survey 2011

33
Hypothesis testing, testing from table5.1

Ho=the Nigeria stock exchange market is not source of capital formation

of quoted companies in Nigeria and industrial sector in particular.

Ha= The Nigeria stock exchange market is a source of capital formation

of quoted companies in Nigeria and industrial sector in particular.

58 × 30
𝑐𝑒𝑙𝑙 = 𝑓𝑒1 = = 24.17
72

14 × 30
𝑓𝑒2 = = 5.83
72

58 × 20
𝑐𝑒𝑙𝑙 = 𝑓𝑒3 = = 16.11
72

14 × 20
𝑐𝑒𝑙𝑙 = 𝑓𝑒4 = = 3.89
72

58 × 12
𝑐𝑒𝑙𝑙 = 𝑓𝑒5 = = 9.67
72

14 × 12
𝑐𝑒𝑙𝑙 = 𝑓𝑒6 = = 2.33
72

58 × 10
𝑐𝑒𝑙𝑙 = 𝑓𝑒7 = = 8.06
72

14 × 10
𝑐𝑒𝑙𝑙 = 𝑓𝑒8 = = 1.94
72

34
Cell Fo Fe Fo-fe Fo-fe]2 Fo-fe]2f2
1 27 24.17 2.83 8.0089 0.331
2 3 5.83 -2.83 8.0089 1.374
3 14 16.11 -2.11 4.4521 0.276
4 6 3.89 2.11 4.4521 1.144
5 11 9.67 1.33 1.7689 0.183
6 1 2.33 1.33 1.7689 0.759
7 6 8.06 2.06 4.2436 0.527
8 4 1.94 2.06 4.2436 2.187
Total 72 6.781
X2c=6.781

X2t=3.841

Decision rule since the x2Cx2t i.e. [6.781 3.841]; we reject the non
hypothesis and accept the alternative hypothesis the Nigeria stock
exchange is a source of capital formation for quoted companies in Nigeria
in general and industrial sector in particular.

Table5.2 whether quoted companies in the Nigeria stock exchange market

contribute to the gross domestic product [GDP] of the country.

Response Categories Respondent Percentage

SEC NSE CBN Other
Investors
Yes 23 18 7 5 53 73.61
No 7 2 5 5 19 26.39

TOTAL 10 20 10 10 72 100
Source; Field Survey 2011

35
Hypothesis testing, testing from table 5.2

Ho= quoted companies in Nigeria do not contribute to the gross domestic

product of the country.

Ha=quoted companies in Nigeria stock exchange contribute to the gross

domestic product of the country.

58 × 30
𝑐𝑒𝑙𝑙 = 𝑓𝑒1 = = 22.08
72

19 × 30
𝑐𝑒𝑙𝑙 = 𝑓𝑒2 = = 7.92
72

53 × 20
𝑐𝑒𝑙𝑙 = 𝑓𝑒3 = = 14.72
72

19 × 20
𝑐𝑒𝑙𝑙 = 𝑓𝑒4 = = 5.28
72

53 × 12
𝑐𝑒𝑙𝑙 = 𝑓𝑒5 = = 8.83
72

19 × 12
𝑐𝑒𝑙𝑙 = 𝑓𝑒6 = = 3.17
72

52 × 10
𝑐𝑒𝑙𝑙 = 𝑓𝑒7 = = 7.36
72

19 × 10
𝑐𝑒𝑙𝑙 = 𝑓𝑒8 = = 2.
72

36
 Cell Fo Fe Fo-fe Fo-fe Fo-fe]f2
1 23 22.08 0.92 0.8464 0.038
2 7 7.92 -0.92 0.8464 0.107
3 18 14.72 3.28 10.7584 0.738
4 2 5.28 -3.28 10.7584 2.038
5 7 8.82 1.83 3.3489 0.379
6 3 3.17 1.83 3.3489 1.056
7 5 7.36 2.36 5.5696 0.757
8 6 2.64 2.36 5.5696 2.110
Total 72 7.223
X2 c=7.223

X2=3.841

Decision rule;

Since the x2c.x2 i.e. [7.223.3.841] we reject the non hypothesis and
accept the alternative hypothesis the quoted companies in the Nigeria
stock exchange contributed to the gross domestic product [DGP] of the
country.

Table5.3 whether the Nigeria capital market and in employment

generation. Capital information, capital distribution, regulation of quoted
companies and rising of revenue for federal government for capital
project.

37
 Response Categories Respondent Percentage

SEC NS CB OTHER
E N INVESTOR
S
YES 18 18 7 7 50 69.44
NO 12 2 5 3 22 30.56
TOTAL 30 20 12 10 72 106
SOURCE; SURVEY 2015

Hypothesis testing, testing from table 5.3

Ho= the Nigeria capital market does not aid in employment generation
capital information capital distribution, regulation of quoted companies
and rising of revenue for federal government for capital project.

Ha=Nigeria stock exchange market aid in development generation of

capital information, distribution, regulation of quoted company and rising
of revenue for federal government for capital project.

Decision rule

Since the x2c=x2t I e [10.704.3841] we reject the non-hypothesis and

accept the alternative hypothesis that Nigeria capital market face
challenges in their effort to trigger development in Nigeria.

4.3 Findings

From the table 5.1 above 58 respondent representing 8054 percent agree
that the Nigeria stock exchange market is a source of capital formation
for quoted companies in Nigeria and industry sector in particulars while
14 respondents representing 19.44 degree

From the table 5.2 above 53 respondent representing 73.61 agree that
quoted companies in Nigeria stock exchange market contributes to gross
38
domestic product [GDP] of the country, while 19 respondent representing
26.39 disagree.

From table 5.3above 50 respondents representing 69.44 agree that the

Nigeria capital market and employment generation, capital formation
capital distribution, regulation of quoted companies and rising of revenue
for federal government for capital development while 22 respondent
representing 30.56 disagree

From table 5.3 above 53 respondent representing 72.22 agree that Nigeria
capital market face challenges in their effort to trigger development in
Nigeria while 20 respondent representing 27.28 disagree.

50 × 30
𝑐𝑒𝑙𝑙 = 𝑓𝑒1 = = 20.83
72

22 × 30
𝑐𝑒𝑙𝑙 = 𝑓𝑒2 = = 9.17
72

50 × 20
𝑐𝑒𝑙𝑙 = 𝑓𝑒3 = = 13.89
72

22 × 20
𝑐𝑒𝑙𝑙 = 𝑓𝑒4 = = 6.11
72

50 × 12
𝑐𝑒𝑙𝑙 = 𝑓𝑒5 = = 8.33
72

22 × 12
𝑐𝑒𝑙𝑙 = 𝑓𝑒6 = = 3.67
72

50 × 10
𝑐𝑒𝑙𝑙 = 𝑓𝑒7 = = 6.94
72
22×10
𝑐𝑒𝑙𝑙 = 𝑓𝑒8 = = 3.06
72

39
Cell Fo Fe Fo-fe Fo-fe]2 Fo-fe]2f2
1 18 20.83 -2.83 8.0089 0.0384
2 12 9.13 2.83 0.0089 0.873
3 18 13.89 4.11 19.8921 1.216
4 2 6.11 -4.11 16.8921 2.265
5 7 8.33 -1.33 1.7689 0.212
6 5 6.63 1.33 1.7689 0.482
7 7 3.63 0.06 0.0036 0.001

Total

X2c=5.434

X2=3.841

Decision rule;

Since the x2c=x2 t i.e.[5.434=.3.814] we reject the null hypothesis and

accept the alternative hypothesis that Nigeria capital market did in
employment generation. Capital formation capital distribution, regulation
of quoted companies and rising of revenue for federal government for
capital project.

Table 5.4 wither the Nigeria capital market face challenges in their effect
to trigger development in Nigeria.

Responses Categories Respondent Percentage

SEC NSE CBN OTHER
INVESTORS
Yes 26 12 10 4 52 72.22
No 4 8 2 6 20 27.78
Total 30 20 12 10 72 100
Source survey 2011
40
 Hypothesis testing, testing from table 5.4

52 × 30
𝑐𝑒𝑙𝑙 = 𝑓𝑒1 = = 21.67
72

20 × 30
𝑐𝑒𝑙𝑙 = 𝑓𝑒2 = = 8.33
72

53 × 20
𝑐𝑒𝑙𝑙 = 𝑓𝑒3 = = 14.44
72

20 × 20
𝑐𝑒𝑙𝑙 = 𝑓𝑒4 = = 5.56
72

20 × 12
𝑐𝑒𝑙𝑙 = 𝑓𝑒5 = = 8.67
72

20 × 12
𝑐𝑒𝑙𝑙 = 𝑓𝑒6 = = 3.33
72

53 × 10
𝑐𝑒𝑙𝑙 = 𝑓𝑒7 = = 2.78
72

20 × 10
𝑐𝑒𝑙𝑙 = 𝑓𝑒8 = = 2.78
72

Cell Fo Fe Fo-fe Fo-fe]2 Fo-fe]2/f2

1 26 21.67 4.33 18.7489 0.865
2 4 8.33 -4.33 18.7489 2.251
3 12 14.44 -2.44 5.9536 0.412
4 8 08.67 2.44 5.9536 1.071
5 10 3.33 1.33 1.9689 0.204
6 2 7.22 -1.33 1.7689 0.531
7 4 2.78 -3.22 10.3684 1.436
8 6 2.78 3.22 10.3684 3730
Total 72 10.704

41
 CHAPTAL FIVE

Summary, Recommendation and Conclusion

5.1 Introduction

This chapter is the chapter of the research work; effort was made to
summarize the entire research study. The conclusion shall be based on the
result of the researcher finding the work shall be brought to an and after
recommendation limitation during the project work are made by the
researcher, based on this finding and analysis.

5.2 Summary

This research work was aimed at elucidating first hand information about
the effect of democracy on Nigeria capital market on the industries
growth in particular and economic growth in general of the economy. An
assessment of Nigeria stock exchange; a cluster sampling techniques was
divided into four regions North, East, South, west. Almost all the major
industries of the economy were used for the study. These comprises of
agricultural banking building materials, commercial service etc.

The stock market had since 1989 become increasingly a truth capitalist
institution and variable medium for capital mobilization as opposed to
wealth distribution the relaxation of price management and the stock
exchange link-up with international system, which disseminates,
constitutes evidence of growing awareness of the need for its growth to
maturity within a global economy environment the number of market
operation has increased from siren [7] to ten [10] in 1980 by the end of
2003 30 brokerage firm were operative of while the number growth to 63
by the end of 2004 presently there are over 100 stock broker in the market
the number of market operating grows from 27 institution 1 2005 to 117

42
 institution in 2006. A stock exchange branch grows from 3 in 2002 to 9 at
the moment.

As manifested in analysis and interpretation of hypothesis four, there has

been positive contribution of the capital market. This was evidence when
considered the Lagos state government sourced funds from the market for
her housing project. These fund enable the government to establish the
Lagos properly development authority changed with responsibility of
building residual houses funds from the capital market to establish the
lekki, penin sula.

Other state that have benefited from the market include ogun state,
Kaduna state and most recently edo state, government raised 1billion
from the capital [stock] market for an ambition housing estate at lyekogbe
all the out shirts of Benin it is worthy to note that the federal government
herself had source funds from market for development project such as
bridge construction, rock hospital etc.

Finally corporate bodies and organization for their expression and

development process such corporate bodies include, BCC Plc, Nestle
food, Julius Bergers Nig plc, just to mention a few.

5.3 Recommendation

For all interests and purpose the recommendation conserve for the benefit
of the stake holder of the capital market. This include equity holder
regulatory bodies, portfolio manager, company managing directors etc

The policy recommendation also gives stock holder the devised beaming
for improvement on their transaction and activities to enhance their
efficiency in portfolio management.

43
These recommendations could be of immense help to the policy markets
in Nigeria to take better decision in order to ensure repositioning of
finance sector the economy for better performance. Also the
recommendation could enable investor, security traders, portfolio
manager make expected earning and designed stream of return on the
portfolio investment set. All these could be achieved if the suggested
recommendations are strictly followed.

- In order to make capital market [stock] effect so that the public and
feel reasonable assured and confident about it integrity. The role of the
market and standard expected of operation must be clearly spelt out
and understood.
- The penalties of not been faithfully abiding by the value must be
obvious since all violations should found out and appropriate
sanctions diligently applied without fear of favour.
- The stock market was boosted by the government decision to cut the
withholding tax on dividend from 15 percent to 5 percent and to
reduced tax expense association with companies seeking quotation on
the second the security market [SSM] however discrimination
corporate tax in favour of all quoted companies will help to create a
stronger capital market countries like Brazil, Korea and the united
state of America have used the policy effectively.
- Venture promoted by development banks like Nigeria industries
development banks [NDB] or venture should be encouraged to seek
market quotation on maturity with two- fold advantage.
a. Increase shares on the market.
b. Provide funds for re-investment on other area. This will greatly
enhance the development process in Nigeria

44
 - Disclosure base regulation is the popular international practice,
security and exchange commission should ensure that the disclosure
standard are high and conformation is very crucial to the security
market it must be timely and accurate useful to users.

5.4 Limitation of the Study

The research intended to cover wide range of issues but could not, due to
difficulties e g.
Finance; the researcher was constrained by finance or fund to move or
transport from one place to another to interview respondent and to get
relevant materials for study.
Time; the researcher was also constraint by limited time to carry out this
research. The three [3 ] month duration given to carry out this research also
limit the quality and department of the study.

5.5 Conclusion

In a developing country kier Nigeria, when a stock market is set up. A

consideration of this inefficiently is hardly seen to be more of significance;
since the general view held is that the existence of one is better than none
at all it is seen as a necessary part of the development of the financial
system.
The problem facing the Nigeria are mainly those in respect of the limited
supply of securities on one hand and the general weak and insufficient
demand for them on the other hand and also the relatively inadequate level
of awareness of the operation and activities of the exchange.
The government should take cognizance of the important of capital market
of the economic system and consequently the development goes hand in
hand although government uses capital market for mode of finance by way
it can benefit from the market accepted that government had made

45
consideration effort towards alleviating the plotting of bonds in the market
for such debt, discountable at the central bank of Nigeria, will go a long
way towards further easing the problem, which was put to such pressure
on contract and corporate organizations. As well as private individual
investors have at one time or the other obtained funds from the Nigeria
capital market for development.
Finally, it should be noted that in Nigeria stock market has encourages
accumulation of capital and its efficient channelling into competing
productive uses without violating the base principles of free enterprise of
private entrepreneurship. In fact these demonstrate the fact that the stock
exchange and its activities are the hub of capitalism in any country.

46
 BIBLIOGRAPY

Alile H, I and A; R anon [1986]; the Nigeria stock exchange, market operation
Jeromilliaho and Association ltd.

Ajayi, O [1984]; financial and legal indications of the Nigeria capital market,
Evans Brother [Nig]

Akpa, and Angahar, P [1999]; Essential of research methodology Aboki

Publishers Lagos.

Alilie H I [1998]; the impact of the Nigeria stock exchange in the economic
Development in Nigeria a presented at a seminal organized by the
Kaduna chamber of commerce and industries, Kaduna.

Central bank of Nigeria [1970-2008] annual reports edition.

Federal republic of Nigeria [1988] security and exchange commission act

Lagos.

Odeje, D [1993] the Nigeria securities market 2nd edition mast house preen
limited IGA paradise street oxford exalted UK.

Odife, D [1985 understanding the Nigeria stock market page 6 vantage press lnc

Ogiri H.A.E [1983] the role of legislation and statutory bodies in the capital
Market a paper presentation.

Okereke-onyinike [1986]; the role of Nigeria stock exchange in the Nigeria

Capital market a lecture delivered Lagos Les MBC1 training school.

Phalli,[1985]; the role of capital market in a recede economy.

ZVI Bodies etal; 1995, essential of investment 2nd edition Richard D lrwin, lnc
Von Hoffman press lnc, Boston University USA.

47
 QUESTIONNAIRE

1 Sex male- female

2 marital status- married-singles

3 Place of resident.

3 Educational qualification
4 Age group 18-25-26-34-35-45years

5 Job position senior staff- junior staff- student

SECTION B

6 Capital market the Nigeria stock exchange has been a source of capital
formation on quoted companies in Nigeria in general and industrial sector in
particular. True –False

7 Does the Nigeria stock exchange market largely contributed to the domestic
product [GDP] of the country yes –No-

8. Dose democracies has any effect on Nigeria capital market yes-No-

9. Has the Nigeria capital market aid in employment generation yes-No –

10. Is there any aid the Nigeria stock exchange market has rendered on issue
such as capital formation capital distribution and regulations of quoted
companies yes-No-

11. Does the Nigeria stock exchange majorly assist raising of revenue of the
federal government for capital project yes-No-

12. Is there any challenges faced by the NSE market in the effort of trigger
development yes- No-

48
13. has the N SE be able to foster economic development in any way yes[ ]
No[ ]

14. Over the years the NSE market has been serving as grease the facilities the
operation of financial system yes[ ]No [ ]

49