FACTORS INFLUENCING NIGERIA DEMAND FOR EQUITY STOCK INVESTMENT
(A CASE STUDY OF NIGERIA STOCK EXCHANGE MARKET)
ABSTRACT
            The purpose of this is to examine those variables that determine investors demand for equity stock in the Nigerian stock market special attention will given to factors such as earnings, dividends and net asset value.A lot of intellectuals have theorized on the factors that influence investment decision in the capital market. Though such theories abound, there is no evident of immediate consensus on the issue among the theorists. This creates a serious gap to be filled the basic issue is whether investment in equity stock is influenced by any particular factor formed the basis of this research work.     For the purposes of this study a number of companies quoted on the Nigeria stock exchange market. The research covers a period of three (3) to four (4) years and efforts are made to see that the following three (3) major sub-groups are fully represented.
-                      Manufacturing
-                      Commercial and
-                      Services
Data have been collected from the Nigerian Stock Exchange market, the annual reports and statement of accounts of sample and several issues of business times. The hypothesis formulated has been tested at both 1% and 5% significance levels using the F – statistic of regression model. This may have jointly and severally the independent variables have a significant relationship with investment demand. From the conclusion. Recommendation such as tune element indicates the rate of change of these variables overtime and encouraging companies to participate in the stock market which will enhance future activities of the Nigeria capital market.
PREFACE
Despite the Federal Government policy towards the development of inefficient market in Nigeria, only a negligible percentage of business enterprise issue marketable securities.
Equity stock being a marketable security is in demand because investors attached value to it, although the degree of value to equity stock in such a way that he goes out to trade on it, has been an academic interest not only in Nigeria, but in most part of the work today.This research work is divided into five (5) chapter one introduces the topic, the background of study, statement and objectives, significance, scope and limitations of study and definition of terms.
Chapter two (2) is the review of related literature comprising theoretical frame work and literature review.
Chapter three (3) is the research design and methodology constituting the source of data, interview questions, samples used and method of investigation.
Chapter four (4) contains the data presentation and analysis of data.
Finally, chapter five (5) treats the findings, recommendation and conclusion which prove a very useful reference guide.
TABLE OF CONTENT
CHAPTER ONE
 Introduction                                                                          
1.1    Background of the study                                                
1.2    Statement of the problems                                                          
1.3    Research objectives                                                                                 
1.4    Hypothesis                                                                                  
1.5    Significance of the study                                                
1.6    Limitations of study                                                                   
1.7    Definition of terms                                                                     
CHAPTER TWO
Review of Related Literature                                                
2.1 Theoretical framework                                                     
2.2 Earnings and dividend                                                                 
2.3 Residual dividend policy                                                 
2.4 Policy studies in Nigeria                                                              
2.5 Factors influencing earnings and dividend                                  
            Reference                                                                               
CHAPTER THREE
Research design and methodology                                        
3.1 sources of primary data                                                    
3.2       Sources of secondary data                                                                     
3.3       Method of investigation                                                                        
3.4       Samples used                                                                             
3.5       Method of analysis                                                                                
CHAPTER FOUR
4.0 P    Presentation of the data                                                                     
CHAPTER FIVE
5.1 Summary of findings                                                                               
5.2 Recommendation                                                             
5.3 Conclusions                                                                                              
      Bibliography                                                                                            
     Appendix                                                                                      
                                    CHAPTER ONE
 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
            The capital market is a section of the financial market, it deals with long term instruments and instrument necessary for financing them. In developing countries like Nigeria, only a negligible percentage of business enterprises issue marketable securities, although recently many companies had been listed on the exchange due to the Federal Government Privatization and Commercialization policy.
            The capital market is for those who need capital for such heavy projects as the construction of oil refineries, dams, roads all of which spread capital over long period just as the Central Bank is at the countries of the money market, the stock exchange market is at the center of the capital market.
            The Nigerian capital market is made up the informal market, the market of negotiated capital funds, new issues market and stock exchange. This study focuses on the Nigeria stock exchange market.
            The stock exchange market is one of the oldest institution in Nigeria capital market trading with six floor at Lagos, Kaduna, port Harcourt, Onitsha, Kano and Ibadan. Each floor or branch of the exchange market has a director and a secretary. The National Secretariat has a director-general and consists of three departments, the quotations department, the administration and the public relations department.
            The main function of the exchange is to regulate the trading in stocks and shares. This includes accepting securities for listing, that is granting quotation. All securities granted quotations are listed on a big board in the main hell of the exchange and everyday, traders (authorize clerks representing the differed brokers) meet at 2.30pm to “call over” the names of the stocks and shares.
            When each share or stock is called out each broker indicates his interest and a deal is immediately consummated. During “call over” bargain. Slips are exchanges by the brokers. Bargain slips from the basic agreement between broker and constitute the main evidence that a transaction has taken place. Contract notes are usually written up from such bargain ships.
            Besides these, the exchange also has the function of authenticating transfers are made other than for transactions that have previously been tone on the floor of the exchange and secondly nominal transfers take place only between blood relatives. This help to discourage the high incidence of multiple applications which has been a feature of open public offers for sale or subscription of shares made in the Nigeria market in recent times.
1.2       STATEMENT OF PROBLEMS
            A lot of interception has theorized on the factors or parameter that influences investment decision in the optical market. Though such the ories abounds, there are no evidence of immediate consensus on the issue among the theorists. This creates a serious gap to be filled. The basic issue is whether investment in equity stock is influenced by any particular factor or by the interplay of these factors.
1.3       RESEARCH OBJECTIVES
            This research work is focused on the attempt to examine those factors that determine investors demand for equity stock in the capital market of the Nigeria stock exchange market, especially the effects of factors.
1.4 HYPOTHESIS
            For this study the following hypothesis were formulated and tested at both 1% and 5% level of significance.
Ho: The multiple regression coefficients are equally significant (the independent variables are equally significant).
Hi:       The coefficients are not equally significant ( the indifferent variables are not equally significant).
1.5 SIGNIFICANCE OF STUDY
            This study will provide information on what influences the Nigeria equity stock investor with this knowledge the management of these firms as well as brokers (stock broking firms) will know which factors or parameter that influences investors and to what degree. The information would be a useful guide to investors as to what company’s stock to invest in.
            Other researchers will find this work useful for further investigation on the Nigeria stock exchange of the Nigeria Capital Market.
1.7       DEFINITION OF TERMS
VALUE OF SHARE TRADED
            The term traded refers to the number of share bought and sold in the market. The value of shares traded is deterred by multiplying the number of shares bought sold with the end of the year market price for the security. This is designated as Y which is the dependent variable. Values of shares traded (Y) = number of shares traded during the year multiplied by end of year market price.
            These three values are recorded in appendix B, C, and D earnings variables. For the purpose of this study earnings shown in appendix is derived by multiplying earnings per share with the numbers of shares outstanding.
            Technically speaking, earnings per share on the common stock is net income after taxes less preferred stock divided payments divided by the weighted average number of share out-standing.
            To compute the weighted average number of shares outstanding the weights are determined by length of time the shares are outstanding.
            In this study earning per share is taken as given in the company’s annual report and it’s in appendix E.
DIVIDEND VARIABLES
            Whereas dividend is a payment of a share of profit to shareholders. Dividend per share is that part of the profit paid out as dividend divided by number of share outstanding, dividend per share
            =          Dividend                                             
                    No of equity share outstanding
            These two dividend variables namely dividend and divided per share are shown on appendix J and F respectively
NET ASSETS VALUE VARIABLES
            Net asset value is defined as the market value of all assets less the book value of all outstanding liabilities. For the purpose of this study the equation below is used to determine net asset value per share.
Net asset value per share
            =          Total asset – Total liability
                        No of shares outstanding during the year
Values for these net assets value variables shown on appendix A, C and D respectively.