THE NIGERIAN STOCK EXCHANGE, GROWTH AND DEVELOPMENT IN THE NIGERIAN ECONOMY
(A CASE STUDY OF STOCK EXCHANGE MARKET BENIN BRANCH)
ABSTRACT
This study attempt to examine the roles of the Nigeria stock exchange in the growth and development of Nigeria economic. The Nigeria stock exchange in spite of its development and nature and other limiting factors that has contributed immensely in the development of the economic. Based on the data collected and tested hypothesis using the person product moment correlation the result shows that their his a significant relationship between the market capitalization of the Nigeria stock exchanges and goods domestic product on one land , and no significant relationship between the size of the Nigerian stock exchange and the industrial production (growth rate ).  Reason and recommendation were made to strengthen the role of the Nigeria stock exchange with the arm of making it relevant and effective economy. Some of the recommendations are: The regulatory body should step up their role in the monitoring the activities of the operation of the market, the government should initiate policies that will promote and develop the exchange.    
CHAPTER ONE
INTRODUCTION
Background of the Study
The capital market exists primarily to facilitate funds mobilization and allocation in an economy.  Capital accumulation is a determination of economic growth, and since economic units are variously evolved in varying degrees, some will have more than their current requirements, while others will have less than their current consumption.  The capital market exists to reconcile these varying and conflicting needs in an economy.  It does this through the creation of financial assets and liabilities with varying degree of risk and returns, capable of meeting the various needs of the economic units.
The stock exchange is an organized capital market charges with the responsibility of providing the facilities capable of enhancing the realization of objectives and needs of these economic units, for instance, Ekundayo (2006) maintained that stock exchange are exchangeable between buyers and sellers.
Ajayi (2006) treated it as a market for the sales and purchases of cooperate and treasury stock.
Adekanya (2005) defined stock exchange as a market where buyers and sellers of stock and shares transact business.  However, members of the public or investors have no direct access to the market, the buying and selling are done by stockbrokers acting on their behalf in order to achieve its functions or roles effectively.
The capital Markey utilizes network of financial institutions.  It also warrants some measures of regulations to be able to maintain fairness to all investors and the economic units at large.
In an economy, the capital market must have some basic functions, firstly, an environment must be created to enable the government borrow locally to finance its expenditure, or for the private sectors to acquire local funds for business expansion.
As noted by Ajayi (2005), the capital market is for raising and investing long-term capital borrowers for a period of full years or more and some times shorter.
Ikoku (2006), also maintained that capital market is seen as a complex institution and mechanism through which intermediate term funds and long term funds are pooled and made available for the business, government and household sectors etc.  The stock Exchange therefore strives to fulfill these roles.
Statement of Problem
The stock exchange as an organized capital market has been identified as a source of medium and long-term finance, which offers in valuable benefits to business organisations patronizing it.  The stock exchange should play a major role in the economic development of the country.  Apart form its fund mobilization functions, it is expected to provide facilities for its financial intermediation role by making it possible for those who have surplus funds to loan it to those in needs of it for production purpose.  However, the Nigerian Capital Market and especially the Nigerian Stock Exchange has been accused of not contributing as expected to the development of the economy, but why is this case?
The research study is set out to find out emphatically the effect which the Nigerian Stock Exchange (NES) has on the development of the Nigerian economy.
Objectives of the Study
The study is primarily aimed at critically examining the impact of the Nigeria Stock Exchange (NSE) on the various sectors of the economy and the benefits derivable from patronizing the market.
This research work is also aimed at investigating how the stock exchange market activities relates to industrial production growth rate.  In this process, the performance of the Nigerian Stock Exchange with economy is assessed.
Research Questions
The relevant research questions include:
Does the Nigerian Stock Exchange market enhance economic development in Nigeria?
What is the effect of stock exchange to economic development of a country?
Does the Nigeria Stock Exchange Market contribute to the development of the gross domestic product of the citizens of Nigeria?
Is there a position relationship between market capitalization of the stock exchange and the economic growth and development?
Research Hypothesis
Hypothesis is the tentative statement formulated on the basis of guiding research problems about a set of phenomena, these are found to be true or false after some findings through study, then they will be uphold or rejected.
The working hypotheses for the study are stated in order of the null and alternative hypothesis.
Ho:    There is no significant relationship between the total market capitalization of the Nigerian Stock Exchange and the gross domestic product market price.
Hi:    There is a significant relationship between the total market capitalization of the Nigerian Stock Exchange and the gross domestic product market price.
Ho:    There is no significant relationship between the size of the Nigerian Stock Exchange and industrial production growth rate.
Hi:    There is a significant relationship between the size of the Nigerian Stock Exchange and industrial production growth rate.
Significance of the Study
The need for the study needs not to be overemphasized, this is because little attention has been given to finding out the extent to which the Nigerian Stock Exchange affects the economy.  It is expected that this study will be beneficial to the individual investors, business enterprises and government.
To appreciate the beauty of the stock exchange activities is a rewarding knowledge for itself.  This study would enable individual investors to discard the “buy and hold” attitude of various securities, it will also help in enlightening the members of the public as to the meaning of shares and stock, also the need to save for unforeseen contingencies by inculcating in them, the savings and investment habit.
This study will also be relevant to business enterprises and the government in the sense that it’s going to bring out the usefulness of the raising funds in Nigerian Stock Exchange as regards reduction in risks and involvement of the public in economic development.
Scope of the Study
The focus of the study is on the Nigerian Stock Exchange, representing a major part of the capital market and can rightly be assured to be the most organized capital source in the country.
The analysis of the impact of the impact of the Nigerian Stock Exchange on the Nigerian economy will be the scope of focus of this project work.  References will be made from inception of the Nigerian Stock Exchange till date and the relevant constitution within this time specified.
Limitation of the Study
In the course of this study, the researcher encountered problems which in one way of the other challenge the easy flow of this work.  These include:
Distance:- In the course of this study, the researcher was  faced with the challenge of actually traveling to the Stock Exchange Market in Benin, Nigeria and visiting some stock broking firms in Lagos.
Time:-  This is one factor that if not effectively managed, hinders a research work.  Here, the researcher properly managed his time effectively and efficiently.
Finance:-  At a time it was difficult and almost impossible to continue because if lack of finance.
Fatigue:-  The human factor also tried to hamper this study by constant body breakdown as a result of fatigue, tiredness and distractions.
Hoarding of Information:- During the research, I noted that those approved for information where not really willing to give it.
Definition of Terms
For the purpose of comprehension of the study, some terminologies relating to the stock exchange market and its growth and development in Nigerian economy will now be defined.  This terms are listed and defined below:
Stock:-  This consist of the capital of a company or the amount of a government of local government loan which has been issued so as to be fractionized at the will of purchase.
Market:-This is a place where buyers and sellers meet for the purpose of transaction of goods and services in order for the seller to make profit and the buyer to gain satisfaction for the purchasing of the goods and services.
Stock Exchange:-  This is a market where shares, stock and other securities are bought and sold.
Debenture:- These are long term loan from members of the public to a public company.
Shares:-  These are the capital of a company which has been issued in a number of fixed positions which can not be subdivided.
Bonds:- These are promises to pay stated sum of money with interest and are issued in multiple of N200.
Gift-edged Securities:- These are means by which government of public corporation raises money and they are known as government securities.
Stock Brokers:-  These are dealers in shares and stock who act as agent on behalf of members of the public who wants to buy or sell securities.
Stock Jobbers:-  They are known as the principals who work on the floor of the house.  They buy and sell securities on their own behalf.
Primary Market:-  This is a market or an avenue for raising new or fresh funds through the insurance of securities.
Secondary Market:-  This is the market which provides the mechanism for the transfer of existing financial assets.
Capital Market:-  This is a market where medium and long term financial assets of more than one year of maturity period are traded.
Money Market:-  This is a market where short-term financial assets with one year maturity period or less are traded.