IMPORTANCE OF THE STOCK EXCHANGE IN PROMOTING NATIONAL GROWTH AND DEVELOPMENT

INTRODUCTION The growing complexities and challenges of global industrial cum business environment characterized by harsh government policies, dwindling. Fortunes and the force of competition have imposed considerable responsibilities on business outfits to either swim or sink. These thus compel companies to depart from being run by a man and his wife or by few friends to assuming bigger status, enlarging their sizes and resources so as to dominate the aforesaid challenges.  Two mean of rising large inventible funds have presented themselves for exploration. A business concern can either borrow from Banks (money market) or access the capital market for same. However, borrowing from bank is usually of short-term nature and also occasion’s high incidence of debt burden and interest payment, which weight heavily against profit, leaving the capital market as a better alternative for the same purpose. To access the capital market and exploit all the opportunities therefore, the stock exchange market is at the center stage moreso, the stock exchange makes a secondary market for the securities of companies that have accessed the capital market. This is the principal responsibility of the stock exchange market the world- over, the case of Nigeria is no exception. This project is undertaken to grasp a thorough knowledge of the role of the stock exchange in the development of the Nigerian economy, how informed are Nigerians about the activities of the stock exchange, are investors adequately protected and to point out certain deficiencies associated with the stock exchange market. In doing so this project will be divided into different chapters each, discussing actual points. This chapter will center mainly on the purpose of his study, its objectives, significance and limitations associated with it, it will help to highlight certain problem relation to the exchange and its use. Chapter two is an attempt by the researcher to studies, opinions, comment, documents and observations related to the topic in questions it is a summary of the writings of recognized authorities and of precious research finding relating to this topic. The third chapter explicitly deals with how the research has to be executed. The sources of data used location and methodology of data and problems encountered. The next chapter is the conclusion will be drawn and certain facts deduced which will be summarized in the very chapter.
LITERATURE REVIEW It is not proper to examine the role of the stock exchange in the development of the Nigerian economy without reviewing the playing field the capital market lilted widespread   shift to market driven economic system and privatization across the globe, the private sector is as in the past decade and half taken a center stage in driving the worlds economies. The private sector could however not have been able to play this role without the development sophistication and dynamism of financial market, which have been instrumental also in the globalization of financial move. Capital market development has become a major component of financial market development in emerging economics. This is borne out of the special role of the capital market in financing development. Universally, the money market is recognized as the short and of the financial market, which functions principally to mobilize and channel funds for short duration such funds are therefore not structured to project financing which most long gestation period. Money market fund are therefore ideal for financing short- term requirement of corporate bodies such as inventory and trade. The capital market on the other hand mobilizes and provides funds to corporate bodies and government for use periods considered to be medium to long term. This typically means of a period of over one year to perpetuity. In essence funds for development factories land, road as well as fund for the procurement of machines and other fixed asset are best sourced from the capital market besides this vital function, the capital market has been acknowledged as an important vehicle for implementing orientation programmes, attracting foreign investment, influencing corporate restructuring and the participation of the public in the corporate sector authors as a market from which large companies and public enterprises attract long term investment funds through a network of financial institution and stock brokers licensed to perform capital market function.
ESTABLISHMENT The Nigeria capital market owes its origin to the establishment of the Lagos stock exchange through the Lagos exchange act of 1961. it was the Lagos stock exchange that latter metamorphosed into the Nigeria stock exchange. This gave rise to other parties in the capital market such as stockbrokers, the registrars, the issuing houses, fund managers and investment advisers. The capital market operates through the following participating institutions. 1.The Nigeria Securities and Exchange Commission. 2.The Nigerian stock exchange 3.The merchant banks 4.The Development banks 5.The non-bank financial institutions with the securities and exchange commission to regulate all these parties securities dealt in are government securities, corporate bonds, corporate share and stock, and mortgages loans, speaking on the depth of the market Ndunagu Victor (1999) saved that it is a this market in terms of the number and value of securities traded and the possible plan is to privatize parastatals like NEPA, NITEL, Refiners and so on, so as to increase the depth of the market and attract foreign investors. The capital market constituency can be broody divided into four categories namely: 1.Providers of find (investors, individuals, unit trust and other corporate bodies). 2.Users of fund (Companies and government) 3.Intermediaries (facilitators stock- broking firms, issuing houses and registrars). 4.Regulatory (securities and exchange commission, the Nigerian stock exchange). As could be seen, while the providers of funds essentially comprise of individuals and companies, the users of fund (issuers of securities) are expected to be companies and government. In order words, individual may not be able to raise money from the capital market as they could do in money market. In this network of relationship, the stock exchange plays a central and indispensable role for which it has been variously described as the “ hallmark” or “ heart” of the capital market.