INTRODUCTION
In this chapter, which is basically the review of relevant literature, discussion would be focused on description of the capital market as it efforts Nigerian economic development for the period of 1993 -2002. In addition, the effect of other companies and broking firms in the economic development and by comparing other stock exchange outside the country in term of performances.
DEFINITION OF STOCK MARKET
The stock market at times called the capital market was defined by Dangall and Ganmnitz (1975) as the complex of institutions and mechanisms through which intermediate term trade and long term funds are polled and made available to business, government and individuals and instruments already outstanding are transpired.
Ajayi O. (1984) defined a stock market as a market for the mobilization of funds from the savings deficit sector, However, Burns and Midlay (1979) defiled a stock market as a market which provides a focus for the activities of buyers and sellers of securities or services.
Okafor F.O. (1983) agreed with this definition, but went further to describe the market as covering all services rendered by institutions and facilities which exist for mobilization of long term funds and for channeling such funds to ultimate users.
More so, the capital market is a network of individuals, institutions and instruments involved in the efficient channeling of funds from the supply to deficit economic units.
The capital market constituencies can be broadly divided into four categories, namely:
(a) Provider of funds (Investors-Individuals, units trust and other corporate bodies).
(b) Users of funds (Companies and Government)
(c) Intermediaries (Facilitators-stocking broking firms, Nigerian stock exchange).
According to Alike and Amao (1986) the stock exchange actually comprises several markets: that is within or annexed to a market for existing securities.
There is again a market for debt securities and market for equities. There is also market for example the petroleum sector, sector for Breweries, pharmaceuticals, the exchange is regarded as a market mainly for otherwise known existing securities as the secondary market.
In the last decade, the federal governments encourage the state and local governments as well as their resource gaps. Consequently, five stage governments have raised loan capital on the market. In 1993, we listed the first Municipal bond-the Lagos Island Local Government 100 Million floating Rate Revenue Bond 1996/2000. The proceeds of the issue was part of the financing for the New Sura Market on the Lagos Island.
However, with the introduction of the Structural Adjustment Programme (SAP) in 1989 and the subsequent adoption of policy instrument such as the foreign Exchange Market (FEM) the deregulation of interest rate structure and divided policy, the Nigerian capital mark has become a more viable option for strengthening their capital structure, for modernization and expansion of operations. In the process, there has been a flurry of right. Issue offers for subscription for equity and debenture stocks.
The stock exchange: it started its operation as the Lagos state stock exchange in 1961 as a non private company limited by guarantee.
When branches of the stock exchange were append at Port Harcourt and Kaduna in 1978. The name was changed to the Nigerian stock exchange. The objectives of the Nigerian, stock exchange “it is the machinery for the mobilization of private and public savings and making them available for productive investment through stocks and shares to facilitate the purchase and sale of securities amongst others.
It is primary purpose and objectives are
(a) To provide facilities to the Nigerian public and now the international investing public for the purchase and sale of stock and shares of any kind and for the investment of money.
(b) To control the granting of a quotation on the stock exchange in respect of funds, stocks and shares of any company, government, municipality, local authorities or other corporate bodies.
(c) To investigate any irregularity or alleged irregularity in the dealings of members with their client.
(d) To investigate any irregularity or alleged irregularity in the dealings of members with their client (inside dealings), any differences or disputes between members and their clients, any complaint made against members by other members of any other parties, provided that such differences disputes or complaints shall relate to or touch on the stock broking business or activities of such members or deal with and decide upon such irregularities differences, disputes or complaints shall relate to or touch on the stock broking business or activities of such member or to deal with and decide upon such irregularities difference, disputes or complaints and to take necessary steps for enforcement of its decision s and awards.
(e) To promote, support, propose legislature or other measures affecting the above mentioned objects and objectives.
(f) To standardize and review from time to time if necessary of desirable, increase or decrease the fees of other charges to be made by members for services rendered to their clients or modify the method of assessing or calculating such fees or charges.
(g) To calculate the stock broking activities of members and facilitate the exchange of information for their mutual advantages and for the benefit of their clients and to offer facilities whereby the public can be informed of prices of shares d
ealing by members.
(h) To co-operate with the Association of stock-Brokers and stock exchanges in other counties and to obtain and make available to members, information and facilities likely to be of advantage to them or clients.
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