BUSINESS FINANCING THROUGH THE NIGERIAN CAPITAL MARKETS A STUDY OF NIGERIA STOCK EXCHANGE
BUSINESS FINANCING THROUGH THE NIGERIAN CAPITAL MARKETS A STUDY OF NIGERIA STOCK EXCHANGE
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Date
2008-12
Authors
FARUK, Mohammed Bamanga
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Abstract
The role of the capital market in business financing through the capital market can
not be over emphasized. Finance is the livewire of every business organization
because the success or otherwise of all business entities are very much depended
on its capital and how the capital is raised. Business finance could be raised by
either short term or long term financing instrument. Business finance could also be
obtained internally or through external sources. Long term financing instrument
such as equity, bonds and derivatives are the major instruments traded on the floor
of exchange. The NSE performs a number of functions which include creating
opportunities for long term borrowing, registration and or quotation of companies’
shares for trading on the floor of the exchange, regulating the activities of
operators on the floor of the exchange, promotion of increased participation by the
public in the private sector of the economy and the provision of appropriate
machinery to facilitate further offering of stocks, shares and other securities to the
public among others.
The encouragement of the public to raise funds for business enterprises is a
function worthy of mention. Surprisingly few companies have made use of the
facilities provided by the NSE. Most Nigerian business men are either ignorant of
these facilities as a source of long term financing or are avoiding the exchange
because of the perceived long bureaucracies involved. This has been identified as
one of the major bottleneck of business enterprises who are in dare need of more
and cheaper sources of funding to grow competitively in Nigeria. To effectively
analyze the role of NSE, a discussion on its belief history and examination of its
activities provided sufficient basis for a critical analyses of its role.
From this critical analysis of the NSE , it is discovered that its role in business
financing is a function of its operational problems and the lukewarm attitude of
Nigerian entrepreneurs towards its facilities.
It was suggested against this background for the NSE to further decentralize its
operations, review its requirement of quotation, introduce more robust method of
trading, clearing, delivery and settlement of transactions in line with global best
practices, improve its legislation to reflect current realities, embark on more
awareness campaign and check inimical activities of stock brokers among others.
Description
BEING PROJECT SUBMITTED TO THE POST GRADUATE SCHOOL
OF AHMADU BELLO UNIVERSITY, ZARIA IN PARTIAL FULFILMENT
OF THE REQUIREMENT FOR THE AWARD OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
DEPARTMENT OF BUSINESS ADMINISTRATION,
FACULTY OF ADMINISTRATION,
AHMADU BELLO UNIVERSITY,
ZARIA
DECEMBER, 2008
Keywords
BUSINESS,, FINANCING,, THROUGH,, NIGERIAN,, CAPITAL,, MARKETS,, STUDY,, NIGERIA, STOCK,, EXCHANGE,