EFFECT OF GLOBAL ECONOMIC MELTDOWN ON NIGERIA CAPITAL MARKET (A CASE STUDY OF NIGERIA CAPITAL MARKET)
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
1.1 Background of the study
1.2 Statement of Research Problem
1.3 Aims and Objective of the study
1.4 Scope and Limitation of the Study
1.5 Research Methodology
1.6 Significance of the Study
1.7 Statement of Hypothesis
1.8 Organization and Plan of the Study
1.9 Definition of Terms
CHAPTER TWO: LITERATURE REVIEW
2.1 Theory of Nigeria Capital Market
2.2 Primary Market
2.3 Secondary Market
2.4 The Roles of Capital Market
2.5 The importance of Capital Market
2.6 Factors Influencing Activity in the Capital Market
2.7 Problem Mitigating Against the Growth of Capital Market and Solution to the Problems
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction of Nigeria Capital Market
3.2 Research Design and Instrument Sampling
3.2.1 Characteristic of the Study Population and Sampling
3.3 Procedure of Data Collection
CHAPTER FOUR: DATA ANALYSIS AND
4.1 A Brief Introduction of the Chapter
4.2 Presentation and Analysis of Data
4.3 Analysis and Presentation of Data According to Test of Hypothesis
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION
CHAPTER ONE: INTRODUCTION
The economic global meltdown stated. In the United State of America in year 2007. However it assumed to be a danger status in September, following the collapse of two of the world biggest and investment, bonus namely Lehman Brothers and Merrill lynch. Like wide fire danger spread to other parts of the world prompting major stock markets to tunable and bumble.
This resulted into capital flight which triggered huge demand for foreign exchange between October and November in Nigeria.
From $1.27billion sold in September, foreign exchange sale shot up to $3.4billion in October and $ 3.1 billion in November. This prompted a sharp depreciation of the Naira as the exchange rapidly rose from N1/7 per dollar between November and December.
But besides, the above impact of the global economic meltdown on Nigeria capital market has been relatively minimal. Unlike capital markets the developed countries which suffered credit crunch, several illiquidity and recorded losses as well as take over by government through bailment measures.
The downturn in the capital market experience in the year 2008, will remain indelible in the minds of many investors and other stakeholders. In the Nigeria economy as the bubbled which was built several years ago. Suddenly, bursts leaving the investor with better experience, before the intervention by regulations to stem the pathetic situation.
1.1 BACKGROUND OF THE STUDY
The initial attempt to establish capital market in Nigeria dated back to 1959, with issue of First Nigeria Development Loan stock by the Central Bank of Nigeria.
This was followed by the inauguration of the Lagos Stock exchange in 1960 it commenced to operation in June, 1961.
Another important development which catalized the growth of the market was the compulsory incorporation of branches of Foreign Corporations following the enactment f the company act in 1968.
In 1972 the promulgation of the Nigeria Enterprises promotion Act otherwise called the indigenization programme gave further implies of the market development accounting for 126.7% smooth in the number of listed equities on the exchange.
The impact of 1977 amendment of the indigenization Act 1972 led to growth of 170.6% in industrial equality overall the development security.
The implementation of true indigenization programme of 1972 and 1977, the statutory requirement that certain public institution like the pension find include the development banks should be a greater percentage of their instrument in the market security.
1.2 STATEMENT OF RESEARCH PROBLEM/ QUESTION
The focus of this research will be to identity thus effect of Global Economic Meltdown of Nigeria Capital Market. In this following research questions.
⦁ What are the effect of Global Economic Meltdown on Nigeria Capital Market.
⦁ What are the effect of Global economic Meltdown on the Nigeria Economy.
⦁ What are the affect of Global Economic meltdown on the Nigeria Investors.
⦁ What are the effect of global economic meltdown on Nigeria currency?
1.3 AIMS AND OBJECTIVES OF THE STUDY
The research project main focus is to take cursory look at the effect of global economic meltdown on the Nigeria Capital Market. Therefore, the aims and objectives of the study will include:-
⦁ To examine the effect of global economic, meltdown on the Nigeria Capital Market.
⦁ To examine the effect of Global Economic Capital Market.
⦁ To examine the effect of Global Economic Meltdown on the Nigeria Economy.
⦁ To examine the effect of Global Economic Meltdown on the Nigeria Investors.
⦁ To examine the effect of global economic meltdown on the Nigeria Currency.
1.4 SCOPE AND LIMITATION OF THE STUDY
The research will focus on the effect, global economic meltdown on the Nigeria Capital Market with special emphasis on the Nigeria Capital Market.
The research will be historical and case study research which may be limited not insufficient finances. Lack of enough time, lack of co-operation from the respondent and the case study this may linder through research. However, effort will be made to ensure that the above. Constraint and limitation do not affect the effective completion of the research work.
1.5 RESEARCH METHODOLOGY
For the purpose of the study, the method to be employed in the collection of data and all necessary information for the purpose of this study will include the primary and secondary method.
The primary method was include the use of;
⦁ Questionnaire method
⦁ Interview method
⦁ Telephone Survey
⦁ Observation method
While the secondary method was also include the use of text book, journals and internets.
1.6 SIGNIFICANCE OF THE STUDY
The importance of this project is to access to the effect of economic global meltdown on Nigeria. Capital Market. The study will also show the effect on the investor and how the capitals market turn able and fumble into capital loss.
1.7 STATEMENT OF HYPOTHESIS
The general hypothesis is to be tested in this is
HO: Global economic meltdown has increased the problem on the Nigeria capital market.
H1: There is no significant differences on the investors before and after the global economic meltdown
1.8 ORGANIZATION AND PLAN OF THE STUDY.
The research work will be divided in to five chapter. Chapter one will have the introduction, background of he study, statement of research, questions/ problems, aims and objectives of the study, research hypothesis, scope and limitation of the study, significant of the study and organization and plan of the study.
Chapter two will treat the theoretical frame work. Capital market operation in Nigeria, historical background of Nigeria capital market, effect of global economic meltdown on Nigeria capital market. Chapter three will discuss about the research methodology. Research design and instrument sampling, research population and sampling, procedure of data collection and constraint to data collection. Chapter four this consist of data presentation and analysis a brief introduction of the chapter and analysis of other data and findings. Chapter five. Will discus the summary, conclusion, recommendations and references.
1.9 DEFINITION OF TERMS
GLOBAL: Having to do with the whole earth, world wide, universal
TURMOIL: Description, often with mental suffering
CONSTRAINT: A limitation or restriction.
CURSORY: Done quickly and without care.
DECLINE: To fill off or loss, movement downward
PROMULGATION: To spread idea, a belief among people or to announce a new law or system officially or publicity.
TRIGGERED: Something that is the cause of a particular reaction or development, especially a bad once.
DIASPORA: The movement of the people from any nation or group away from their own country
PERCEPTION: The way you notice things.
INCEPTION: The start of an instruction or an organization.
2.1 THEORY OF NIGERIA CAPITAL MARKET
Capital market can be defined as those institution, which are concerned with providing long term credit. It is the market where large companies and public enterprises attract long-term investment fund through a network of financial instruction and stock broker, licensed to perform and operate in the capital market.
In acknowledge of the funds mobilized by those institution, bounded stock or shares and mortgages are issued and traded. In summary it is the market for the buying and selling of shares in public liability companies and other stock, in so doing the market actually performs the function of financial intermediation where by the saving of some member of the society for productive investment.
The capital market includes the entire financial system, capital bank of Nigeria, commercial banks and other financial institution.
The capital market includes the entire financial system, Central Bank of Nigeria, Commercial Banks and other financial institution.
The capital market is divided into two categories.
i.) Primary Market
ii.) Secondary market
2.2 THE PRIMARY MARKET
The securities and exchange commission sit at the apere of the primary market regulating. The issue of public companies and all private companies with foreign participation.
The market is concern with the new issue that is, it deals with the issue and sales of new securities, the operators in this markets are the issuing houses such as stock broaers, merchants, banks, commercial banks, mortgage bank, insurance companies and the Central Bank of Nigeria and Government.
The investors pass on their resources to some of these institution for investment purposes.
Such, investment can be inform of stock and shares through issuing houses (stock brokers and merchant banks). They equally. Issue securities of a company previously quoted on the stock exchange which may in the course of time place another issue in order to raise additional funds.
Trade bank 350,000,000 (50 shares at 11.20 issuing house FBN)..