Nigerian Capital Market

Nigerian capital market started rolling from 1960 when Nigerian Stock Exchange ( Lagos stock) exchange was opened. At present the market is gaining depths and becoming steady. This stock exchange is the pivot of the Nigerian capital market.
This exchange is providing different types of funds to bring the accumulated public wealth into the stock market. At the same time, the large-scale industries of Nigeria are listed on this exchange. There is also another stock exchange in Nigeria that is working with the medium and small-scale industries of the country and providing good support to strengthen the Nigerian capital market.

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The development of the Nigerian capital market has some other reasons too. A number of Nigerian banks are investing in the Nigerian stock market so that they can roll the money and can earn some good profit from the market.

The recently introduced minimum capital requirements for the bank have encouraged the banks to choose the stock markets. The Nigerian capital market is still gaining depth and so that it was a bit risky for the banks to take the decision but they took the risk and the results are very positive.
It not only encouraged the individual investors but at the same time provided some good support to the growth of the Nigerian capital market. It is true that the Nigerian capital market is performing well and the country is experiencing some historical public offers by the banks like the Zenith Bank. But at the same time, it is also true that the market has to go a long way to because still now the NSE’s market capitalization is, much lower than the GDP.

According to the ongoing trends, the market capitalization should be nearer to the GDP or in certain cases it is more than the GDP as in the case of Johannesburg that recorded 239% of GDP. The turnover ratio of Nigeria stock exchange was 12.4% in 2005. The Nigerian bond market is also passing through a developing phase.

The main participants of the Nigerian capital market are the Securities and Exchange Commission (regulatory), Nigerian Stock Exchange, stock brokers, trustees, issuing houses, registrars. The investments are done by the insurance companies, pension funds, institutional investors and the individual investors.

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Last Updated on : 21st July 2016

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