EFFECT OF NIGERIAN STOCK EXCHANGE ON INDUSTRIAL DEVELOPMENT

(Business Administration and Management)

EFFECT OF NIGERIAN STOCK EXCHANGE ON INDUSTRIAL DEVELOPMENT

ABSTRACT

This research work focuses on effect of Nigerian stock exchange on industrial development, the study examined stock market economic growth nixies in the Nigerian economy.  It specifically investigated the effect and the causal relationship between the two variables in Nigeria. The researcher conducted some literature related works likes reference, research, design, this work was designed to find out the extent in which Nigeria stock exchange helped in the growth and development of individual sector.The  method used in the collection of data are primary and secondary method, in primary data collection method of pernasl data, literature review, questionnaire and also secondary data collection was used as an additional sources of data. The use of literature related test like: book, journals, newspaper and other forms where adopted as well. However, the research work is determined to evaluate the effect of Nigerian stock exchange on the general findings over business growth especially in recent years by using different types of foreign investors method of bringing in more foreign currency into the economy. The following recommendation in to alleviate some anticipated issue and weakness on Nigerian stock exchange which adequate publicity should be given to Nigerian stock exchange and the public educated on the activities of the Nigerian stock exchange to induce more participation.

TABLE OF CONTENTS

CHAPTER ONE

INTRODUCTION

  1. Background of the study                                      
  2. Statement of the Problems                          
  3. Purpose of the study                                   
  4. Research Questions                                            
  5. Research Hypothesis                                   
  6. Significance of the study                                      
  7. Scope of the study                                             
  8. Definition of Terms.                                            

CHAPTER TWO

Review of Related Literature

2.0 Evolution of the Stock Exchange                      

2.1 Evaluation of the Stock Exchange                    

2.2    Historical Development of Stock Exchange     

2.4 General relationship of the stock exchange and the

economy.                                                          

2.4    Advantage of the stock exchange                 

2.5 Function of the stock exchange in influencing the

development parameters.                            

2.6 Industrialization                                                    

CHAPTER THREE

Research Design, and Methodology

3.1 Research Design                                           

3.2 Area of the Study                                          

3.3 Population of the study                                  

3.4 Sample and Sampling Procedure                     

3.5 Instrument of Data Collection                          

3.6 Validation of the Instrument                            

3.7 Reliability of Instrument                                 

3.8 Method of Data Analysis                                 

3.9 Method of Data Analysis                                 

CHAPTER FOUR

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

4.1 Data Presentation and Analysis                        

4.2 Test of Hypothesis                                         

4.3 Summary of Findings (result)                          

CHAPTER FIVE

DISCUSSION OF FINDINGS, RECOMMENDATION AND CONCLUSION

5.1 Discussion of Result                                               

5.2 Conclusions                                                  

5.3 Suggestion for further Findings                                

5.4 Recommendations                                         

Bibliography

Appendix

CHAPTER ONE

INTRODUCTION

  1. BACKGROUND OF THE STUDY

Industrial growth forms the basis for industrial development is not only needed for its ability to improve living standard. It also acts a weapon for building national strength and prestige. Therefore, industrial development implies the increase of industrial expansion of quality and quality of output and the institutionalization of industrial growth process. It also involves technical activities of own routine nature concerned with translating research findings or after with translating research findings or offer scientific knowledge into products or process.

        With the concept of investment as a central factor in the acceleration of industrial growth and development and the prominence given to industrialization, steps have the establishment of the Nigerian stock exchange (NSE) the evolution of continued existence of Nigerian stock exchange has always been small lots of shares to exparched into lumps large enough to be bought by institutions provided vast number of different shares to be trades and providing abroad market in government securities its economics significance depends on its ability to mop  up financial capital for investment purposes these includes providing liquidity and enhancing these marketability of new issues of stock thus reducing the real cost to business firm by expanding the scope for obtaining fund.

        Others function of the stock exchange included the offer of guidance to the business management in relation to the present cost of capital so that the business man can determine his level of investment appropriate to the firm. Access to the vast number of capital that are in very small amount of money that in their aggregate have commend over vast quantities of wealth. It also make it possible for the transfer of funds that impose only a minimum of administration efforts he lender. By this activity the stock exchange is able to provide an avenue for long term investment to be financed by fund provided by individuals many of who to make it available for a short time. Or with draw it at will.

        The competitive nature of the stock exchange makes it possible to aloft funds efficiently which is achieved by the market ability to available securities in a manner based on the capitalized value of the company’s expected future earnings.

        Apparently, only if stock are valued in this way will finds be provided most abundantly and at most reasonable terms to the most promising innovation who accounting to the classical economic theory has the greatest use for them and who is the one that can obtain the points which will serve as the investors rewards. And it is when shares are valued in relation to the expected capitalized value of the firm that effective disciplinary advice which punishes management whose operation are inefficient or unprofitable.

        Therefore, a reliable rate which result from investment to new factories machinery, equipment and materials to increase the physical capital stock of the nation. The stock exchange market plays an important role in propping up financial capital and provision or market for quoted so as to chance the fulfillment of these economic growth parameters. This investing so as to actualize the economic growth.

  1. STATEMENT OF THE PROBLEM

The ignorance of the stock exchange has brought about how participation of firm an individual engagement join the stock exchange and this has also limited the availability of stock and shares that could be traded on the stock market.

        The Nigerian stock exchange has been established and the substantial financial resources available in the country, coupled with the existing institutions one can claim that the entre spectrum of the capital market has not been sufficiently active, especially when compared with the capital units of similar or laser aged units in other developing countries.

The factors responsible for this are identified to include.

  1. High cost of transaction
  2. Lack of transparency
  3. Poor economic performance
  4. Corruption
  5.    There is price fixing and over valuation o f shares.

This study intends to evaluate the performance of the effect of Nigerian stock exchange in terms of its trading activities and determines the extent to which its contributes to the capital formation process of the economy if at all there is causalities between them.

  1. PURPOSE OF THE STUDY

In general the study hopes to take a close look at the effect of Nigerian stock exchange in industrial development in other to:

  1. Find out the extent in which Nigerian stock exchange has helped in the growth and development in industrial sector.
  2. Find out whether Nigerian stock exchange has contributed to the industrial development.
  3. find out if Nigerian stock exchange are facing the problem oif delay in delivery and settlement in stock transaction.
  4. Find out whether Nigerian stock exchange are having a financial problem in transaction.
    1. RESEARCH QUESTION
  1. Why Nigerian stock exchange have not helped in the growth and development in industrial sector.
  2. Why Nigerian stock exchange have not contributed in industrial development
  3. Why Nigerian stock exchange market are facing the problem of delay in delivery and settlement of stock transaction.
  4. Why Nigeria stock exchange is having financial problem in transaction.
    1. RESEARCH HYPOTHESIS

Ho: Nigerian stock exchange has helped in the growth

and development of industrial sector.

Hi:     Nigerian stock exchange has not helped in the

growth and development of industrial sector.

Ho:   There are contributions made in Nigerian stock

exchange in industrial development.

Hi: There is no contributions made in Nigerian stock

exchange in industrial development.

Ho: There some problems of delay in delivery in Nigeria

stock exchange in industrial development

Hi: There is no problems of delay in delivery in Nigeria

stock exchange in industrial development

Ho: There are financial problems facing Nigerian stock

exchange in transaction

Hi: There is no financial problems facing Nigerian stock

exchange in transaction.

  1. SIGNIFICANCE OF THE STUDY

The effect of stock exchange and a catalyst in the development of the economy has not been a question of debtor. The stock exchange exist as a sources of fund to the industrial development and also for the channeling of personal saving stock into industrial place for trading company’s stock. It also creates room for capital widening stock rather than Deeping it. The benefits of stokc exchange quotation is the result of lower cost of capital when raising funds through the market as stock exchange helps to allocate funds between industries and also makes funds available to the mostly procedure industries which hence develop the nation.

  1. SCOPE OF THE STUDY

the scope of this study covers only the effect, the stock exchange as a marketing floor for quoted share and stock thereby providing liquidity for the shares and stock helps in the moping of units of inevitable funds which on the aggregate down large enough capital.

1.9 DEFINITION OF TERMS

Industrial Development:  The increase of industrial

expansion of quality and quantity of output in industrial growth process.

Stock: The ability to mop-up financial capital for

investment purpose.

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