The stock market commonly known as the stock exchange is
encompassed in the capital market.
It can be described as a place where savers and investors are
brought together to trade on securities and sources of finance. It has
basically, the same functions as any other financially 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 living existing in the country. How does this need relate
to the stock exchange and its activities? Has it been successful in this
particular area? It should be borne in mind through that the economy of
any country is a very complex issue especially in the case of Nigeria.
Since its establishment which was necessary due to same pressing
factors, the economy has undergone a lot of drastic changes.
As will be discussed later, the impact of the stock exchange
in the business world of Nigeria has in some way benefited the country.
Whether it has done so successfully or not will be determined not just
over its short history but also in the future years to come.
Although other means of raising funds exists, the stock
exchange no doubt adds more sophistication and thus efficiency which is
necessary for every developing country in this case Nigeria.
The project has been embarked on mainly to give a general
idea on the life of the exchange and its operation. It also hopes to
point out certain deficiencies associated with it and the viewpoint of
different individuals, firms and companies on it. In doing so, this
project has been divided into different chapters, each discussing a
vital point or aspect.
This first chapter centers mainly on the purpose of this
study, it’s objectives, significance and limitations associated with
it. It will help to highlight certain problems relating to the exchange
and its use.
The next chapter is just a simple discussion the stock
exchange. It is the literature review of this project. It tells us
what different author’s have said in relation tot his topic and also
their point of view on this topic.
Chapter 3 is a brief narration on how the research on this
project has been carried out, the difficulties encountered and what type
of facts and sampling I have based this project on.
The last two chapters on the other hand is detailed analysis
on this project. It is the main basis on which this project falls on.
Date analyzed here are data got from the general public form this I was
able to draw some conclusions and deduce certain facts which have all
been summarized in the last chapter.
Various means have been embarked on to make this project
possible. It has been worthwhile through because as a friend put it, no
person can hope to carry out an effective, influential and flourishing
business if he is not well versed on the financial market.
This importance of a developed economy, can never be over
emphasized. An efficient stock market goes a long way in carrying out this functions.
This fact is not withstanding, we fined out that a lot of people in
this country are not even aware of the stock market, it’s functions and
how it can facilitate the development of the economy. In an under –
developed economy like ours, the need for this market is paramount of
the economy is expected 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
expect. The development of the economy cannot be ensured of the market
itself is not only developed. In this problem if it is not checked
well, not only defeat the goals of the market as an outlet for finance.
This is a major set-back in the development of the economy.
It is obvious that the establishment of the stock exchange is at stake and if nothing is done now, it could gradually be eroded.
1.2 OBJECTIVES OF THE STUDY
The objective of this project is to present a through study of
the stock exchange and to throw more light on it’s importance in the business world.
The main objective thus are:
- To bring closer to have the reality of the stock market by:
- showing it’s development
- it’s functions and importance;
- it’s impact in the business world and the development of the economy
- To highlight the deficiencies of the market
- To find possible solutions to these deficiencies.
These objectives I believe should serve to inform fellows Nigerian’s
on the activists and importance of thestock market. Also to draw the
attention of fellow users of the market to the deficiencies that exist
there and possible solutions so as to improve on the deficiencies.
1.3 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 how standard of loving. Nigeria’s 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 foe rising 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 it’s functions well. As this study goes
a long way to throw more light on this market and its’ function, it is
hoped that an awareness will be instilled in it’s readers and the
suggestions put towards considered.
1.4 LIMITATION OF SCOPE OF STUDY
This project centers on the stock exchange (market). A very
thoroughly research on this study is not very possible in that
interviews and questionnaires have to be limited since only a little
sector of the population patronize this market.
Distance from source of information is another problem. The
stock exchange is only situated in certain places and so any vital
information necessary has to be got on a secondary basis if it is not
possible to travel around.
Time factor is also another notable factor. Nobody seems to
have time to even fill questionnaires due to pressing engagements. Also
combining this project with my other academic work has been very trying
and at times interview have been put of due to the work-load I have and
the time available to do it.
Another important factor also arises during the collection of
data. You find out that people are not ready to talk on any issue which
involved. They tend to feel that any information given will implicate
them in some ways, so most individuals try as possible to give a rosy
picture of the entire procedure even through things that do not happen
1.5 TEST OF HYPOTHESIS
This study will test the following hypothesis.
Main – hypothesis: Use of stock exchange is not extensive due to ignorance especially on the part of individuals.
Sub – hypothesis:
- under-development of this market
- confidence in the market’s future development
questions which will serve as a guide for the collection data are:
- Are you aware of the stock exchange?
- Where do you raise your funds?
- What are it’s functions and importance?
- Do you patronize this market and why?
- What are it’s deficiencies?
- How can they be over some?