CHAPTER ONE

1.0   INTRODUCTION

        A stock exchange is an organized auction market with physical location and facilities for trading in stocks and shares through professional Intermediaries known as stockbrokers. It also co-ordinates the activities of other capital market operators to raise funds from the public or institutional Investors for companies and government for development purpose.

        It is also Intermediary between Investors who wish to Invest in projects and companies who are in need of investors. It is an original market where large and small Investors alike buy and sell through stock brokers.

        The stock exchange provides the essential facilities for companies and government to raise money. It can also be seen as a place where companies can raise funds for expansion to make their business bigger and better.

1.1   GENERAL OVERVIEW OF THE STUDY

        The Nigeria stock exchange is the only stock exchange in Nigeria. It is owned by its members, most of its members operate in Nigeria cities and town. There are also some market operators that work within the Nigeria stock exchange. The exchange is directed by the council. The council has an upper limit of 25 members comprising Individuals who by their track record can make valuable contribution to the exchange.

        From its establishment in 1960, the Nigeria stock exchange (NSE) has served as an engine of growth for the Nigeria economy. As at 1961, the stock exchange market operated as the Lagos stock exchange trading with only 19 securities. It was later change to Nigeria stock exchange and it established branches in Kaduna, Port Harcourt, Onitsha, Ibadan and Lagos which is called trading floor.

1.2   STATEMENT OF THE PROBLEMS

        This research work is carried out to know the role of stock exchange in economy development of Nigeria. Emphasis is hard on the issue, problem and prospects of stock exchange market. The important step is the need for continuous information to explain the benefit of the stock exchange to the Nigeria public and also give them access to continuous information. Some of the problems are discussed below:

1.     Low rate of capital accumulation and formation: The capital used for setting up the stock exchange is too small; enough capital should be made available so as to upgrade their technology for them to be able to complete with the outside countries and also to attract foreign Investors.

2.     Poorly developed communication facilities: Information is power, the moment the Investors get Information about the market early. It will be easier and the economy will develop.

3.     Lack of confidence: Most Nigeria have no confidence on the brokers, they labour so hard to set up companies but do not know the importance of quoting them in the stock exchange to include them in the listing of stock exchange.

4.     Poor education of Investors: Most Investors are uneducated thereby reducing the level of economic growth. Seminar should be organized for them so as for them to Invest their money rather than spend it impulsely.

1.3   OBJECTIVES

The management of stock exchange is not relenting in its effort of technology that will move the market forward so as to enable it compete favourably. Its objective lies on the role which is listed below:

1.     Control of quotation prices on the stock exchange in respect of stock and shares of government.

2.     Regulating of dealing activities of members and clients Investors.

3.     To liaise with the stock exchange of other nation in updating their information and management of information facilities.

4.     To co-ordinate stock broking activities of dealing members and facilitate the management and exchange.

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