CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The stock exchange is a market where large and small investors

alike buy and sell through stock brokers, the stock of shares of companies and

government agencies. The exchange provides the necessary mechanism for

companies and government projects through individuals who own share

corporations for the ultimate economic benefit of all. A stock exchange and outlet

for people who for one reason or the other wish to dispose off their share in

companies or wish to buy them.

The idea of stock exchange originated in United Kingdom as far back as the 16th

century when merchants devised a system of pooling their risk and reward in such

a way that their individual share could be bought and sold through the market

place. Historically, these merchants who were seen to opening new sources of trade

abroad, but conscious of the high risk of which their venture might be subjected to.

Joined together with others willing to invest, to form joint stock companies in

which both the risk andd rewards were pullet! together, the capital was divided into

1
shares and one investors could sell his shares in the venture to someone else, and if

he wishes, can convert his shares back into money. The earliest registered

2
company that financial on joint stock principles was mucous company in about

3
1555.

In order to enhance their. shares transaction, the merchants to their agents, (stock

brokers) were reported to be gathered in coffee house in

the old city of London were the stocks were trade. A mechanism this stock

without being dependent upon finding an exact match for their own purchase or

sale.

The stock exchange as we know it today still continues to play its roles, although a

number of sophisticated mechanisms have been developed for the smooth running

of the capital market, the protracted nationalist struggles for Nigeria freedom

argument against Nigeria economic development was influence by foreign capital

control on the believe that Nigeria have not gotten enough capital for her economic

development With this view in mind, Nigeria stock exchange was established.

1.2 STATEMENT OF PROBLEM

The economic development of Nigeria has to be looked in relation to the stock

exchange marker, and also the various ways in which this can be achieve. In the

process of doing this I would likely encounter some problems, one of which is how

the Nigeria exchange help to accelerate economic development of the nation or

4
otherwise how investors are been encouraged and even the public in general by the

practice and mechanisms of the operation of Nigerian stock exchange.

Furthermore, the question of effectiveness of the stock exchange in its role as

arbitrator in the distribution of Nigeria wealth shall be examined.

1.3 OBJECTIVE OF THE STUDY

The objective of this project is to highlight the main feature of the Nigeria stock

exchange, its mode of operation and the role it has been playing as the cornerstone

of the nation capital market. And also, what it can do as economic entity in the

ongoing development process in Nigeria. In view above therefore, the study of the

available literature on the stock exchange in order to gain an insight in to function

operation growth and role in economic development shah c explored. Other issues

to look at are; It will be of utmost importance to oiler suggestion where necessary

t: solve some other problems far d by the institution in the socio-economic

development.

1.4 RSEARCH QUESTION

The socio economic development of any country depends largely on me financial

sector of such country. The stock exchange market serving as the money market is

5
an essential organ through which organization is raise more capital to aid them

whirl their area of coverage.

The study will attempt to find answers to We following question, which will then

help to form or draw up conclusion on whether or not the stock exchange market

has really live up to expectation in the development of the Nigeria economic.

Among the question to sack answers to are;

1. What are motions behind the establishment of the Nigeria stock exchange

market?

2. Tow does the stock exchange market assist the business organization in to

grow?

3. How does it protect the interest of the ordinary investor from been defrauded

by overzealous and ambitions business owners?

4. What measures are put in place to avoid lost of investment by investors and

also to stabilize the value or stock?

This are many more question, the study will like to find cut.

6
1.5 SIGNIFICANCE OF THE STUDY

The significance of the study is underlined by the fact that it widens die horizon

of the knowledge of the general public to understand the operation of the Nigeria

stock exchange, this making them to appreciate the contribute on of the exchange

and opportunity available - Its assessment will in no doubt provide an industry.

Therefore, the recommendation here in, will in no small measure serve as a guide

towards improved performance this project work will be of immense benefit to the

operation of the capital market and academic purpose.

1.6 SCOPE OF THE STUDY

The project covers a period from 2005-2011. However, the time interval is not

necessary exclusive as references can be made to the period before and after 1994

although, inference can be made from the stock market of other country where the

need arises. This work covers the actual contribution and activities of Nigeria stock

exchange (NSE) towards the development of the country.

In. addition, consideration is given to the prospect and problem that have some

effects in the operation and or performance of the Nigeria stock exchange.

And finally, some recommendation that would boost the overall effectiveness and

7
efficiency of the Nigeria stock exchange (NSE) operation shall be provide. The

NSE is said to be most crucial financial institution especially in an economy that is

becoming over conscious of the capital market In that capacity it also plays an

essential political role in terms how effectively it can contribute in the distribution

of wealth.

The Nigerian stock exchange from the day of its inception as (The Lagos stock

exchange) has to struggle with all kinds of problems as would be expected not only

as part of nation process of growing up, but also in reflection of its complex

environment.

The Nigeria society, whatever may have been the limitation, however, 1those who

patronized the Nigeria stock exchange want to be assured that nothing is done to

shake their confidence in the organization.

1.7 DEFINITION OF TERM

1. CAPITAL MARKET:

The capital market is the market from which the large company and public

enterprise and even government attract large. Long term investment funds through

network of financial institution and stock brokers, licensed to perform market

function.

2. STOCK BROKERS:
8
A stock broker is a person who arranges a transaction between other people and

afterward receive a commission usually a percentage the value of transaction, if

doing so the stock broker in the Nigeria stock exchange but and sell on behalf of

client as well as for themselves.

3. DEBENTURE:

Debentures are long term security not issue to a bonowing company to a lender

acknowledge a substantial debt in which interest is earned.

CHAPTER TWO

LITERATURE REVIEW

9
2.1 THE FINANCIAL MARKET

Financial markets are institution and procedures that facilitate transaction in all

types of financial claims. The purchase of your homes, the common stock that you

may own, and your life insurance policy all place in some types of financial

market.

Some economic units spend during a given period of time than they earn. Other

economic units spend less on current consumption that they earn for example,

business firm in the aggac1ecl usually spend more during specific time period chat

they earn as a result of mechanism is needed to facilitate the transfer of saving

from those economic unit with a saving surplus to those with a saving specific.

in other for the complex economic and financial activities at our modern world to

operate smoothly financial market must exist to facilitate the information of funds

between savers and investors. Felegan (1987), in his work titled redefining Nigeria

financial asset are sold for or bought with money. However, 10 contrast to goods

and services, they are not consumable but rather, claims which the holder of USC

at a future data to obtain consumable (i.e. good and service).

Furthermore, to present the contend at further, professor Anoa, A. of the University

of Benin (UN1BIEN) in a paper presented at the economy way forward in 1982,

described the financial market as a special from that deals only on securities and

10
start from the ordinary market that brings a buyer and seller of good and services

together.

The financial market in any society is the frame work within which the saving of

some members of society is made available to other members of society for

productive investment. In the financial digest publication of National association of

polytechnic and Banking student (NAPAB B) volume 1993, Mr. Michael Onifante

stated that any person who has money left after given consideration to transaction,

precautionary and speculation motives for holding money must make an important

decision should these surplus be used to improve his current living stand and or

invest in to earn more income or build capital for the future at, and he choose to

invest, them he must seek the mean of doing it, For there to take place, every

society needs two categories to take major categories of financial institution?

I. PRIMARY MARKET INSTITUTION

II. SECONDARY MARKET INSTITUTION

a. There are those institution that provide the means for directing saving in to new

investment outlets that is the market for process whereby investors pass on

theft resource to institution, process which will either funds to these other

institution that have outline their investment, e.g. issuing houses mortgage

bank, commercial banks and other finance houses.

11
b. Second market institution: This is the market for the sales and purchases of the

secondary market is the stock exchange, which provides a market in which the

holder of existing quoted shares willing wishing to sell such share can make

contract with individual and institution who are interested in buying them.

2.2 THE DIFFERENT TYPES OF FINANCIAL MARKET

Basically there are types of financial market namely:

I Money market and

II Capital market

MONEY MARKET: This is the market for short term funds and

securities including treasury bill, treasuring certificate, negotiable certificate of

deposits, commercial paper and other funds of less than one year duration. The

rapid growth of the money market in the last decade has created opportunities for

both investors and finns to have a lorded variety of short term financial more

easily then ever before, (Adekany F; 1986).

CAPITAL MARKET: This market for long term fund and securitis, whose tenure

or duration exceed beyond are year. There include long term barns, mortgage

bonds, preference stock ordinary share federal Government bond (digible

12
development stock of guided securities and industrial loans). It is a complex

institution and mechanism through which intermediate funds and long term funds

are pulled and made available to business to government and individual are

instrument already outstanding are transferred,(Gavmits and Daudal, 1975).

2.3 THE CAPITAL MARKET DEVELOPMENT

The Nigeria exchange as an organization is the central institution of the Nigeria

capital market. The act invites of the capital market resolves around it and it acts as

the umpire between the sellers and the buyers. The development of a formal capital

market in Nigeria dated back to 1946, when the ten year plan local ordinary way

promulgated and the first government securities were floated. The instruct lanai

facilitate fist the operation were however, absent and did not continence until

fifteen year later when the Lagos stock exchange (now the Nigeria stock

exchange) was established. It formally came into existence on l5

1. The capital requirement of the government was either by loans or

grants from mostly the colonial masters.

2. The capital of the organization private sector was me largely from

external private sources or from banks.

13
3. There was no mechanism for either the issue of or the trading in

such securities even if there were available.

4. There was no sizeable organized co-operate sector to provide a

regular supply of securities.

The Lagos stock exchange transformed into the Nigeria stock

exchange on December 1977 following the acceptance of the

recommendation of DR Pius Okigho commission.

This commission was set up in response market. In that capacity, it piay

an essential political role in term of law effectively it can contribute in

the distribution of wealth.

2.4 EMERGENCE OF THE CENTRAL SEC URITY CLEARING

SYSTEM

Central security clearing system, this is a method where share will be issued

without the certificate through automatic system. In April 1997, the central

securities clearing system (CSCS) was established by the NSE and CSS implies the

introduction of an automated securities trading and clearing system. Its primary

goal is to improve speed code by which shares may be freighted via electronic

system; (Idowu, 1997).

14
2.5 PROBLM ENCOUNTERED IN THE NIGERIA CAP1TAb MARKET

The Nigeria capital market is for falling short of the main economic criteria of a

perfect market Like most development market I1e problems have been highlighted

in the major area ones. They are: The public outcry against the perceived

inadequacies in the market recommendation on how to improve the performance of

the capital market at the times. The commission is reportedly recommended among

others, the decentralization of the exchange with autonomous power but having

similar listing requirement. The government accepted the principle of

decentralization but opted for a National stock exchange with branches in different

part of the country today, the exchange is on Lagos, with trading, flour, in Kaduna,

Port Harcourt, Kano, Onitsha and Ibadan.

The period between 1960-1971 was spent by the official of the exchange, the

issuing house and the capital issues committal in establishing a capital market

whose operation and rules of or procedures were accepted generally to private

sector and the foreign controlled companies in particular. The then prevailing self

regulatory rules of the London stock exchange was adopted almost in its entirely

which had stood the test of time and been accepted by most of the parent bodies of

the Nigeria foreign subsidiaries. It was clear that stock exchange was anxious to

nurse. The organization as to ensure its acceptability by public. The historical

account reared a fill picture of the development and crusading effects of the agent

15
of change to create additional control mechanism towards any practices by the

users market As a public clearing house for seek and shares, the NFS is said to be a

most crucial financial institutions, especially in a economy that is becoming ever

conscious of the capital to earn better return for themselves, coming the by 1996

published accounts, most of big players in the economy recorded a decreasing post

tax profit These contribute to the recent drop in their share prices. The reason for

the poor performance of the economy is last of effective demand due to income of

the generally of the people.

The jobber would also provide a ready market especially for the fived interest.

Securities which hardly moves at all. It is therefore, necessary to have jobber on

the stock market for their presence would render he securIties nmst more

marketable.

2.6 GOVERNMENT CONTROL OVER THE FINANCIAL MARKET

The influence of the government and its financial agency, central Biak of Nigeria

(CBN) over the financial market in Nigeria is for reading and pervading. The

central Bank, control and regulation of money market determine to a very large

volume and cost of credit in market

The interest rates arc determine and administered by the forcer. at demand and

16
supply in the credit market and thereby kept relatives

Low. The central bank of Nigeria (CBN) monetary and credit policy guidelines

including the prescription of sectarian and sub.

A. LACK OF MODERN INFRASTRUCTURE: The available of the necessary

information required for the efficient and timely dissemination of emanation of

information to the international comity on the activities of the Nigeria central

market.

B. SECURITIES PRICING: This has been subject of debated among analyst and

market operation alike. Between 1977 and 1992, securities pricing in the market

was regulated by the Securities and Exchange Commission, base on the net assets

value profitability over the year and other non-quantifiable factors. The public

outcry against the above method of providing lead to deregulation on 1992 and

market force will allow determining security price in the primary/market rather

than SEC per stock was raised from 10 kobo to 20 kobo. This has further gone up

and security can now appreciate by 50 kobo or more on a day provided the brokers

making the price can define asThe result is that shares prices of the blues chip is

companies have increase considerably, which accounts for the increasing market

capitalization. However, the market is still guided.

17
C. INADEQUATE OPERATING RESULT: The poor operating result

of most of the companies and economies as a whole given cause for concern.

Investor arc here for one purpose sectarian distribution of a commercial and

merchant bank loan and advance apart from its control credit through aggregate

selling on the roles of expansion(Security market and journal vol.12,1987).

The capital market also come the pervading influence on tac government. By

assuming the role major suopilers and the sc capital lunds Ihe government

determines the peace and caused oF activities in the market. Interest rate and

yield in capitai market rc also largely administered and kept below security value

of loan able funds in the market by official policy, as in the case of market loan

rate are maintain in government stock to minimize its debt burden. Also, of

interest is the increasing role played by the government influencing the volume

and price of private firm.

2.7 SOLUTION TO THE PROBLEM OF CAPITAL MARKET IN NIGERIA

The problem facing Nigeria capital markets are many. This are suggested since

Nigeria capital lack modern infrastructure, it is required which the investor need

order to arrive at inbreed on the country industry and company the wish to invest
18
in. therefore, the government should make it available for the modern capital

market the communication system such as telephone, computer internet etc.

Also, the role of jobbing on a stock exchange is very necessary. However, the role

has now been eliminated by the stock exchange, and the government should take

control and allow the jobber would also provide a ready market especially or the

lixed security.

It is therefore, necessary to have jobbers on stock market for their presence renders

the securities mush more marketable.

2.8 THE SECURITIES AND EXCANGE COMMISSION (SEC)

2.8.1 HISTORICAL BACKGROUND OF SECURITIES AND EXCHANGE

COMMISSION

The Securities and Exchange Commission (SEC) started originally as capital issues

committee in July 1 962. The capital issues committee was ad-hoc committee that

hand1ss the few securities issued between 1962 and 1973 when its name was

changed to capital issues commission (C.I.C). in 1978, the C.I.C was changed to

Nigeria Securities and Exchange Commission (NSEC). The composition of the

former committee was then enlarged to include the general manager of the Nigeria

industrial development bank (NIDL). By virtue of id; position, it became the apex

organ to regulate the capital market in Nigeria.

19
2.8.2 FUNCTION OF SECURIRTIES AND EXCHANGE COMMISSION

-Determine the amount, timing and pricing of securities to be sold on the exchange.

Registers all securities to be traded in the capital market.

- Carries out public enlightenment programmed such as; workshops, symposia and

seminars to educate the public.

- Determines the basis of allotment of securities in the public offer.

- Audits the books of companies and institutions dealing on stock matters.

- Registers other stock exchange dealers in securities as securities to be traded in

the market.

- Determines the control of the prospectus and other issuing memoranda.

(Okechuku O.C, 2008).

2.8.3 MISSION OF SECURITIES AND EXCHANGE COMMISS1ON

The mission of Securities and Exchange Commission is to develop and regulate a

capital market that is dynamic, fair, transparent and efficient, to contribute top the

Nation economic development.

Its essence is to encourage.

20
 Leadership by example.

Transparency.

Discipline.

Honesty.

Effectiveness to excellence.

Punctuality.

Innovativeness.

Fearless.

So as to be the most African leading capital market regulator, (Okechuku O.C,

2008).

CHAPTER THREE

RESEARCH METHODOLGY

3.1 INTORDUTION

Research method is the process of arriving at dependable solution to problems

through the planned systematic collection of data and analysis and interpretation of

21
such data. There are various types of research methods depending on the particular

field of study.

3.2 BABIC RESEARECH DESIGN

This study is aimed at bringing information on the performance of stock exchange

market in the development of Nigeria economy. The study will take the form of

analytic sugary of a case study of Abuja stock exchange market will form the basic

source of information for this research study, A attempt will be made to have a

representative sample size that can enhance for reacting deduction to the purpose

of my generalization.

3.3 POPULATION AND SAMPLING

Population is the area where the case study of topic chosen (that is Nigeria stock

exchange) is covered.

Before we can have a data analysis and uses we must take a sample from the

population. As mush as possible, a sample must be representation of the

population.

Otherwise the estimate of population value. Sampling may be unfeasible to strictly

all the people or things which have quality, we are interested in, it may be almost

impossible to locate everyone concerned and a right move to co-ordinate such a big

22
project even if they would. Another reason is that sampling is often more accurate

than studying all the people or things in which were interested.

3.4 SOURCES AND METHOD OF DATA COLLECTION

The method of data collection in this research has been the use of direct

observation, field word, literature review formula and comprehensive literature

review. I will only discuss this method briefly for the purpose of this research

work, such methods includes:

3.4.1 OBSERVATION

This involves examination of book of account of events and transaction with the

aim of obtaining some first has information of the research observation from staff.

3.4.2 INTERVIEW

This involves face to discussion and exchange its leads with numbers of staff of the

related organization were information will be collected for the research in progress.

This methods of data collection is effective and give the desire result when the

interview which takes place first into the researcher overall fact finding strategy.
23
3.4.3 QUESTIONNAIRE

Some of the questions related to this topic were drawn by the researcher for the

respondent is reply so as their leisure or convenient

time. The researcher followed those respondents to obtain the complete

questionnaires from there who did sent their reply.

ADVANTAGE OF METHODS INCLUDES

1. It is less expensive form of time, material and human resources. IL

Confidential answers are filled easily.

2. Interview bias is avoided.

3. The information fills in the answer of the convenient time.

4. More information can be covered.

DISADVANTAGE OF METHODS INCLUDES

a. Now response rate is high.

b. It units the survey or research to educated only.

c. It wastes time since the information fills in the answer of their convenient

time.

24
d. No room for probing and accessing as such the answers are accepted as

finals.

e. There is no cell back for further response.

3.5 TECHNIGUES OF DATE ANALYSIS

Data are raw facts which do not save any useful purpose until process or

converted into a more measuring form.

To construct a good project of this nature, the following features were taken into

consideration, e.g. accuracy, reliability, consistency, timeliness, adequacy, and

suitability of the various classifications.

3.6 JUSTIFICATION OF THE METHOD AND TECHNIQUES

The researcher decided to use the simple percentage because of its simplicity in

terms of application. The respondent could express their feeling and opinion and

it gives for comprehensive research. It also gives a percent knowledge of the

situation and operation.

25
 CHAPTER POUR

4.0 DATA PRESENTATION AND ANALYSIS

4.1 INTRODUTION

This chapter deals with examination, analysis and interpretation of the research

data, on an assessment of the Nigeria debt crisis; the way is collected tough

questionnaire method survey.

26
42 HISTORICAL OF THE CASE STUDY

The background of the, case study is finding that helps the research to force mush

about the case study of this research. The case study debt management office

Abuja, as a department of its own was established and has more fans in 1978, from

the international market (1CM) for the execution of number of project. The weak

terms of study and adequate for growth. The external can be trace on billion jumbo

loans.

4.3 PRESENTATION AND ANALYSIS OF DATA

The responses to the entire question are very relevant to the study and are analyzed

in tabular form, using simple percentage (%). Out of the 100 questionnaires

administered, 80 were returned, from the 80 returned, 10 were not interpreted. The

problems of Nigeria debts can be analyzed and traced to mis-appropriation of

funds the led the research to says, in the interest of equity, those who have

benefited in any way from Nigeria debt Problems should contributed more to the

situation of the problems.

Question one to three (1-3) are under section Apart of the questionnaire and

stipulates mainly to whether or not the Nigeria stock Exchange has been to achieve

its aim if not to also find out if failure has contributed to the present debt crisis of
27
the financial market. Question 4-6 suggests for the possible and the responses to

these questions are tabulated as shown below.

TABLE ONE: RESPONSE FOR QUESTION FOUR (4)

REPONES NUMBEROF RESPONDENTS PERCENTAGE (%)

AGREED (YES) 60 75

DISAGREED (NO) 10 12.5

NO COMMENT 10 12.5

TOTAL 80 100

Source: Survey 2017.

From the above table, it will be clearly seen that 60 respondents (75%) agreed that

the problems of Nigeria debts should be traced to misappropriation of fund, while

10 i.e .12.5% disagree and 10 being 12.5% would not comment on their

observation.

TABLE TWO: RESPONSE TO QUESTION

NUMBER OF
REPONSES PERCENTAGE (%)
RESPONTS

28
YES 75 93.75

NO 5 6.25

NOCOMMEN
- -
T

TOTAL 80 100

SOURCE: Survey Date 2017

For the above table, it has been clarified that the question; If proper management of

external and internal debt could stop crisis in Nigeria attracted 75(93.75%) positive

agreement (yes) and 6(6.25%) negative agreement (NO).

4.3.1 In question five (5) the researcher wanted to know of the poor Operating

system /result of the Nigeria stock Exchange market should be considered as one

of the problem generating to the crisis. Respondents sent in their view and it is

analyzed in the table below.

TABLE THREE: RESPONSE TO QUESTION FIVE (5)

REPONSES NUMBER OF RESPONDETS PERCENTAGE (%)

70
YES 87

NO 10 12.5

29
NO COMMENT - -

TOTAL 80 100

SOURCE: Survey Date 2017

From the table above, it will be seen clearly that respondents

i.e.87.5% of the total respondents agreed that poor operating result of the Nigeria

Stock Exchange market should be considered as one of the problems generating to

debt crisis while 10 respondents 12.55 said no in disagreement.

4.3.2 Question 6-10 under section C of the questionnaire was to confirm from the

view of the public if is any possible solution so as to upgrade the standard of the

financial market and wipe out debt crisis. This led the researcher to ask in

question 6 that, should government make available communication system such as

telephone and computer internet if it will reduce the inefficiency in modern

infrastructure. Below is the responses sent presented in a tabular form.

TABLE FOUR: RESPONSE TO QUESTION SIX (6)

NUMBER OF
REPONSES PERCENTAGE (%)
RESPONDENTS

30
YES 30 37.5

NO 20 25

NOCOMMNT 30 37.5

TOTAL 80 100

SOURCE: Survey Date 2017

From the above table, it has shown clear that the question was not so welcome by

the public as 30 respondents i.e.37.5% could not comment on their observation,

and 20 respondents i.e.25% disagreed leaving only 30 Le, 37.5% to agree that

should government make available communication system such as telephone or

computer internet it will receive the inefficiency in modern market.

4.3.3 In question seven (7) the researcher recalled the termination of the jobbers is

called back, it could render security much more marketable. And behind are the

responses of the public.

TABLE FIVE (5) RESPONSE QUESTION SEVEN (7)

REPONSES NUMBER OF RESPONDNTS PERCENTAGE%

TRUE 75 93.75

3.75
FALSE 3

31
NOCCOMMENT 2 2.5

TOTAL 0 100

From the table above, it will be seen clearly that 75 respondents i.e.9335%

supported the researcher view that if the jobbers are called back, t could render

securities much more marketable. But then, 3 respondents i.e. 3.75% disagreed and

two could make any comment.

4.3.3 The researcher in question Eight(s) decided to look at which one will be more

benefiting to the Nigerian Stock Exchange whether the issuing of debenture or the

issuing of Bond. And here are the views of the respondents in a tabular form.

TABLE SIX: RESPONSE TO QUESTION EIGHT (8)

REPONSES
NUMBER OF RESPODT PERCETAGE %
DEBENTURE

5 6.25 6.25

BOND 15 18.75

32
BOTH 60 75

NO CONDUCT - -

TOTAL 80 iWO

SOURCE: Survey Date 2017.

From the above table, 60 respondents being 75% suggested that the issuing of both

denture and bond are still benefiting to the Nigeria Stock Exchange market. While

15 i.e. 18.75% suggested that issuing of Bond will be more benefiting and 5

i.e.6.25% preferred the issuing the issuing of Debenture as they felt that both will

be more beneficiary to the Nigeria Stock Exchange Market,

44 TESTING HYPOTHESIS

Sonic hypothesis statement would be tested for the purpose of this research work.

Ho: Rank and other rnulti-national companies declaring huge profit should not

be made to purchase government securities which will be converted to cash

in settlement of Nigeria debts.

33
Hi: Banks and other multinational companies declaring huge profit should be made

to purchase government securities which will be converted to cash in

settlement of Nigeria debts.

4.5 STATEMENT DISTRIBUTION OF RESPOUDENTS

TABLE SEVEN (7)

NUMBER OF
REPONSES PECETAGE
RESPONDENCE

34
AGREED 75 93.75

DISAGREED - -

NO COMMENT 5 6.25

TOTAL 80 100

SOURCE: Survey Date 2017.

From the table, it will be see clearly that 75(i.e. 9375%) respondent of the total 80

respondents agree, (Hi) that, Barks and other multinational companies declaring

huge profit should be made to purchase government securities which will be

converted to cash in settlement of Nigeria debt, while 5 respondents being 6.25%

could not comment on their views.

It can therefore be concluded that Bank and other multinational companies should

buy government securities which when converted to cash can lift of some burden

from Nigeria debt.

4.5.1 Ho: Should government stop the billion jumbo loans they are collectively.

ft will not reduce the level of external debt.

35
4.5.2 Hi: Should government stop the billion jumbo loans they are collectively.

It will reduce the level of external debt.

The table above indicates that 65 respondents i.e. 81.25% of the total agree (Hi)

that, should government stop the billon jumbo loan they are collecting, it will

reduce the level of external debt; while 5 respondents being 6.25%

disagreed (Ho) and 10 respondents being 12.5% felt different or had

nothing to say. It is therefore concluded that, Government should stop

their billon jumbo loan as reduce the level of external debt.

4.6 RESEARCH FINDINGS

In this chapter, we have used simple percentage (%) method in the tabie from to

test our hypothesis in order to address Debt issues problems through a lot of

different strategies. Section A of the questionn1re has brought us to a conclusion

that despite the effort of the Nigeria Stock Exchange, it perpetrators are not

encourage the development of Nigeria economy as most of the problems faced by

the NSE are as a result o negligence of duty.

36
The section B part of the questionnaire has proved to us through public opinion

presented in a tabular form that the problems of Nigeria debt should be trace to

misappropriation of funds (Table one), and that if proper management of external

and internal debt are applied, it will reduce the debt of crisis in Nigeria.

Section C part of questionnaire exposed us to the possible solution (through

public opinion) to the problems of the debt issue it was suggested that jobbers who

render securities much more marketable.

Should be called back, government should stop their billon jumbo loan collecting

and Bank and other multinational companies from the excess interact made should

be made to buy securities which will be converted to cash to settle Nigeria debt.

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 CHAPTER FIVE

5.0 SUMMERY, CONCLUSION AND RECOMMENDATION

5.1 SUMMERY

The economic recession of recent limes which had made the developing countries

high dependent of foreign loans through scheme of debt restricting and

rescheduling has highlighted the important of developing a strong base of domestic

salting, thus the establishment of a performing control market such as he Nigeria

stock exchange within the Nation will satisfy the idea.

The Nigeria Stock Exchange as a cornerstone in the capital market is a recent

development compared with the origin in London (London Stock exchange) which

has established in the 16th century, it: was established and incorporated in 1960 as

Lagos Stock Exchange limited by the guarantee and it commence business in 1961,

it is today now in Lagos, Kano, ; Kaduna, port-Harcourt, Enugu, and Abuja. Stock

Exchange was created by the federal Government in the 1998 budget, following

the recommendation of the odife road of the general of the Nigeria capital market

(Business time, January, 1998 page 1 and 10). Since this primary aim of the study

38
is to assess and analyzing of the structure and growth of the securities markets

during the period under the review which covers between 1960- 1996 was taken

using such parameter like the increase in the number of transactions on the Stock

market over the years, the volume of shares old and values sold. The general low

performance of the Nigeria Stock Exchange Market as revealed by the findings

was as a result of various inhabiting factors such as the nature of the stock Market

itself and the attitude of the Nigeria investors which have always presented for

dabble hurdles. Also, social-culture problems, infrastructure, inadequacies,

frustration in t 1cening requirement, rigidly in the pricing method and inadequate

information have always pose difficult for the good performance of Nigeria Stock

Exchange.

5.2 CONCLUSION

To make the capital market more alternative to investors, there Is need to remove

the constraints mentioned in order for it to catch up with other developing country

stock market. Although, various factors that restrict its growth persist, bold steps

have to be taken in major directions for efficient developing of our stock market.

The Nigeria Stock Exchange being disagreed because of overdependence on oil by

the government has not help matters. If the government uses the opportunity open

39
to it by the current economic recession to re-assess and rewrap the capital market,

it wil assist in deilvering a hher standard of !Mng in the nation. Another issue is

that, the authorities of the capital market shouid educate local entrepreneurs on the

advantages of going pubcs. It is interesting to note that the use has already started

this. A depressed economy would require among other things a dynamic capital

market that is invested and in accomrnoda1ng perhaps through mergers and

acquisition of companies that would otherwise liquidate.

Finally, it should bear in minds that the use cannot (itself) be isolated from the

effects of recession but will it built mechanism it would in a developing economy

such as Nigeria supply vigor and vitality to investors industries and to economy in

general.

5.3 RECOMENDATION

If the market is to meet up with the challenge and requirement o the future, a lot

have to be done especially in the area of:

i. Computerization of the trading floor.

ii. Removal of legal restraint of the central securities clearing system (scs) as

regard holding share certificate.

40
 iii. Ensuring that the Nigeria Stock Exchange meets the standard of the world

emerging market.
iv. Complete unguided deregulation that allows the interplay of demand and

supply to determine the prices of shares.

v. Adequate information should be made available for respective investor

especially foreign investors who require reliable and time Information on the

country industry and company they wish to invest.

vi. Government should cut down of its borrowing from banks and increase its

patronage of the capital market.

vii. All investors protection funds should be created especially for investors.

This should be in addition to the already existing mandatory deposit for

stock brokering for protection of foreign investors In case of bad investment

viii. The NSC should start undesired enlighten on he use of global Deposit Share

(GDS) by non united states companies in raising funds from the United

States Capital Market.

REFERENCE

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Alile, H.. I and Anao, AR (1998): The Nigeria Stock Exchange in Operation.

Lagos jeromelacho and Associates limited.

E. C. Osula, (1990): introduction to Research Methodology, Ilupeju. Press Lagos

Dennis 0. Odife, (1965): Understanding the Nigeria Stock Exchange Vantage press

New York.

Falegan SB (Chief) (1957): Redesigning Nigeria financial System, University

Press Limited, Ibadan.

Fredenkurno (1973): The lagos State Exchange Rules, practices and Procedures;

institute of Administration Ahmade Bello University, Lana.

Home, J.V(1966): Financial Management and policy practice; Ha 6 Edition, New

York.

MrG.V, Hammond RC.A Chairman/Managing Partner Akintola Williams and

Managing External Debts by (Being paper presented at the mandatory

continuing, professional calculation [MCPE] programmer of the ICAN,

July-December, 997 1.Lecture series).

Okechuwu O.C (2008): The tneory and practice of capital market, Ntiona1 Board

or techncal education (NBTE) Kaduna, RM.B 2i39 kaduna. Kaduna state.

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