IMPACT OF NIGERIA STOCK EXCHANGE ON CAPITAL FORMATION

Abstract

Since the Nigerian stock exchange started its operations in 1961, it has not yet been able to attain efficiency as is the case in other countries and as such its inherent impact on capital formation in Nigeria has not been clear enough. The main objective of this study, therefore, is to explore the role of the stock exchange on capital formation in Nigeria. Time series data were applied in carrying out this research work, using the variables; Market Capitalization, New Issues of Instruments, All Share Index, Volume of Transaction, Value of Transaction. Ordinary Least square (OLS) method of analysis was adopted to determine the. The result showed that the Nigerian stock exchange plays a significant role in capital formation. Against the above result, we recommended among others that the primary market segment of the Nigerian Stock Exchange should find a means of relaxing some of the listing requirement to both first and second tier securities market. This will encourage more unquoted companies to get listed in the stock market thereby increasing the depth of the market.