price of a company stock is an indication of the performance of company where
stock is properly priced, investors can invest in the most profitable companies
based on the stock prices of the companies.
is in line with the foregoing that the researcher has decided to appraise the
efficiency of stock pricing on the Nigerian Stock Exchange
doing thus, the researcher adopted the historical and descriptive methods of
research. Data was sourced through the use of interviews, questionnaires and
journals. The chi-square techniques of data analysis was employed in
conjunction with percentage and tables.
on the analysis carried out, it was found that stock on the Nigerian Stock
Exchange were efficiently priced.
findings reveal that the Nigerian Stock Exchange is faced with a number of problems
such as, the retention attitude of Nigerian investors and also the problem
of an underdeveloped financial system
and finally the oligopoly structure of the NSE does not augur well for
competition and development.
made include the need for government to pursue its current privatization
process with more vigor, and that there should be a significant lowering of
corporate tax rates on publicly quoted companies, which increase public
confidence in the Stock Market, to mention but a few.
economy to remain afloat in it’s bid for survival in today’s globalization,
deregulation and liberalization of markets, it needs to have an efficient
financial system to direct the allocation of its resources capital markets and
institutions, of which the stock exchange is an integral part of have become of,
paramount importance in a dynamic economy as Nigeria.
capital market is a sub-set of financial system that provides the accelerated
growth of the economy. This it does by efficiently channeling fund from
investors into productive sectors of the economy. It serves as an avenue for
government and companies to raise long-term funds to fiancé their activities.
capital market consists of a network of institutions and individuals comprised
of regulators and operators who,
together, facilitate the smooth operation of the market. In other words, the
capital market comprises, providers of funds (investors), users of funds
(companies and governments), intermediaries (stock brokers, issuing houses, registrars)
and regulators (SEC, the Nigerian Stock Exchange and Central Bank of
Nigerian Capital Market is made up of basically two components the primary and
secondary market. The initial sale of securities from the issuing corporation or
government to the investor is done in the primary market. The issuers uses the
funds raised to expand production, build infrastructures and the like very few
investors can be persuaded to tie up their funds indefinitely. Therefore,
securities are usually negotiable,
enabling the initial buyers to re-offer the securities to any interested
party at any prices which is mutually satisfactory. It is, therefore, a
function of securities exchange to provide an arena where such mutually
satisfactory prices may be determined. It is in the regard that it becomes
important to analyze the stock pricing function of the Nigerian capital
OF THE PROBLEMS
result of both institutional and individual investors staking out their hard
earned money in order to earn a reasonable return on securities acquired in companies, it would be necessary
to know whether the shares and securities acquired in companies quoted in the Nigerian Stock Exchange are property
priced. However, there is great need to critically consider the following
relevant problems as regards the research topic:
Lack of information from listed companies
Lack of knowledge of the operations and
functions of the stock exchange.
Difficulty in obtaining quotation in the
Lack of clear understanding of the pricing of
shares and securities in the Nigerian Stock Exchange
OF THE STUDY
the topic suggest, this study focuses on the pricing function of the Nigerian
the study confines itself to history, operations and functions of the Nigerian
capital market in relation to stock pricing.