CHAPTER ONE

1.0       INTRODUCTION

1.1    BACKGROUND OF THE STUDY

          The stock exchange is a vital economic institution. The height of development the world has attained makes the stock exchange market services indispensable. The SEM is seen as a vehicle of fund mobilization and the development of local capital in Nigeria. It provides the facilities that make it possible for buyers and sellers to meet. Perhaps, An example of a stock exchange market is the Lagos stock exchange established in 1961 through the Act of parliament as a result of the need for a market for the selling and buying of securities. The stock exchange market is meant to be a strong and very important source of capital in the capital market for the development of the West African sub-region.

          Over the years, the stock exchange market has been on the downward swing and is characterized by low growth. The market has defied all necessary changes made to strengthen of the SEM is characterized by unstable market growth, low level of income saving, corruption, inflation of market prices and lack of interest. These and many more have made the SEM to lose focus, thereby causing a downward movement of the economy.

          It is this necessary to direct a searchlight on the activities of the SEM as a body where in lies the hope of our economical development so as to assess its achievement, problems and prospects in helping to actualize the noble objectives of acts that set it up.

 STATEMENT OF THE PROBLEM

When the Nigerian stock Exchange market was established in 1961 Nigerians from all works of life thought it a step in the right direction. It was hoped that with the establishment of the SEM, our economy  could by better for it.

It is against this back-drop that the researcher has set out in a bid to find lasting solutions to these problems.

1.2        OBJECTIVE OF THE STUDY

The major objective of this study is to make a reliable contribution on how the SEM would must up to its responsibilities as the backbone of the Nigerian economy.

However, this study will eritically examine all those bottlenecks that make it difficult for the SEM to leave up to its billings.

It will also discuss measures to encourage saving and issue of securities of government and other organization.

The study will also find out the easiest and shortest means of issuing and transferring shares for greater efficiency.

Finally, this work will make suggestions and recommendations based on the research finding.

1.3       SIGNIFICANCE OF THE STUDY

Although students research abounds in this area this work will serve as a addition to existing literature in this topic.

It would also educate must uninformed people about the roles and responsibilities of the SEM.

This project would also provide insights to students of baking and finance who are not well informed about the prevailing situations in the Nigerian stock exchange market.

Above all, the essence of the study is to point out a positive direction for a vibrant and professionally efficient SEM. The resultant efficiency will be reflected in high ethical standard of workers and translate to a very high image for the NSE with obvious and positive economic implications.

1.4     HYPOTHESES OF THE STUDY

          A research hypothesis is a scientific statement expressing the relationship between two or more variables which is meant to be tested.  In the light of the primary objective of this study, the following hypotheses have been formulated

1.       Ho:   The development of the Nigerian Stock Exchange is not positively associated with economic growth in Nigeria.

2.       H1:   The development of the Nigerian Stock Exchange is positively associated with economic growth in Nigeria.

1.5     SCOPE OF THE STUDY

          In view of its primary objective, this study focuses mainly on the activities of the Nigerian Stock Market without detailed reference to other markets in the capital market.  The study covers activities of the Nigerian stock market for a period of 28 years, from 1981 to 2008.  The choice of this period is anchored on the fact that it covers both the relatively small and high activities performance of the market.

1.6     LIMITATIONS OF THE STUDY

          This research was limited by certain constraints which include difficulty in sourcing data from certain relevant organization, non availability of data on certain variables, restrictions on accessing certain materials on the internet and insufficient financial resources for the study.

          Lastly, this study was also constrained by inadequate time on the part of the researcher, since attention had to be given to other course work.