IMPACT OF CAPITAL MARKET ON THE ECONOMY OF NIGERIA

CHAPTER ONE
INTRODUCTION
1.1   BACKGROUND OF THE STUDY
The stock market commonly known as the stock exchange is encompassed in the capital market. It is the very core of this market because most activates clamed out revolve around it. It can be described as a place where savers and investors are brought together to trade on securities as a sources of finance it has basically, the same function as any other financial institution which comprises. The financial system the stock exchange plays an important role in the development of our economy a developed financial system they say is a developed economy. The primary aim of every nation I believe is to improve the standard of live exiting in the country. How does this need relate to the stock exchange and its activate? Has it been successful in this particular area? It should be borne in mind though that the economy of any country is a very complex issue especially in the case of Nigeria. Since its establishment which way necessary due to some pressing factors, the economy has under gone a lot of drastic changes
1.2    STATEMENT OF THE PROBLEM
The importance to a developed economy can never be over – emphasized. An efficient stock market goes a long way in carrying out this function. This fact not withstanding, we find out that a lot of people in this country are not even aware of the stock market, its function and have it can facilitate the development of the economy. In an under – developed economy like, the need for this market is paramount if the economy is expect to be improved upon. Another problem associated with the stock exchange is that of development. Trading on the exchange has not been as extensive as was expected. The development of the economy cannot be ensured if the market itself is not well developed. This problem of not checked will not only defeat the goals of the market but also remove any existing. Confidence in the market as an outlet for finance. This is a major set back in the development of the economy.
1.3   OBJECTIVE OF THE STUDY
The objectives of this project is to present a thorough study of the stock exchange and to throw more light on its importance in the business world The objective thus is:
v To bring closer to home the reality of the stock market by:
a) Showing its development
b) Its functions and importance
c) Its impact in the business world and the development of the economy
v To highlight the deficiencies of the market
v To find possible solution to these deficiencies. This objective I believe should serve to inform fellow Nigerian on the activities and importance of stock market. Also the draw the attention of fellow users of the market to the deficiencies that exist there and possible solution so as to improve on the deficiencies.
1.4   LIMITATION OR SCOPE OF STUDY
This project centre on the stock exchange (market). A very thought research on this study is not possible because of I’m a beginner and also only a little section of population put ronise this market distance from source of information it another problem the stock exchange is only statute din certain places and so any vital information necessary has to get on a various text about the market.
1.5   SIGNIFICANCE OF THE STUDY
This study is important in the sense that it has to do with the economy of this country. An under developed stock market we said means an under developed economy thus low standard of living. Nigerian being conservative people, they need to be encouraged to embark on any venture. The stock market being relatively new when compared to the money market, which is also an outlet for raising funds but short term ones, confidence in it has to be gradually developed. If it is hoped for the market to be a success and for it to carry out its function well. As this study goes along way to throw more light on this market and its function, it is hoped that awareness will be instilled on its readers and the suggestion put toward considered.
For complete understanding of this project, these form have been defined.
Financial market
Market for raising funds, where saving and investment are brought together
Economic development
To increase or improve on the welfare of a nation through its productive section
Securities
Financial instrument / assets traded in the market to raise funds
Capital
Funds required to financial productive of either good of services
Investment
Utilization of capital resources for the maximum reward
Abbreviation
SEC – Securities and Exchange Commission
NSE – Nigerian stock exchange
NEP – Nigerian enterprise promotion acts of 1972 and 1977