ABSTRACT

The Nigerian stock exchange (NSE) has been created to serve various function such as often of business guideline to top business management concerning cost of capital for the Nigerian stock exchange provides avenues for  long term investment. These function credited to the stock exchange is expected to create positive effect on the general business and industrial growth of the country.

However, this research work is determined to evaluate the effect of the stock. Exchange   on the general business growth especially in recent years. In carrying out the research work with the above aim in mind efforts will be made to disclose relevant findings thus drawing necessary solutions and recommendations to alleviate some anticipated problem on the Nigerian stock exchange to be disclosed during the research work.

CHAPTER ONE

1.0            INTRODUCTION

1.1     BNACKGROUND OF THE STUDY

Industrial growth forms the basis for industrial development is not only needed for its ability to improve living standard. It also acts as a weapon for building national strength and prestige. Therefore industrial development implies the increase of industrial, expansion of quality and quality of output and the institutionalization of industrial growth process. It also involve  technical activities of a own routine nature concerned with translating research findings or other with translating research findings or other scientific knowledge into products or process.

With the concept of investment as a central factor in the acceleration of industrial growth and development and the prominence given to industrialization, steps have the establishment of the Nigerian stock exchange (NSE) the evolution of  continued existence of the Nigeria stock exchange has always been small lots of shares to e  parceled into lumbs large enough to be bought by institutions provide vast numbers of  different shares to be trades and providing a  broad market in government securities its economic significance depends on its ability to mop up financial capital for investment purpose these include providing liquidity and enhancing these marketability of new issues of stock thus reducing the real costs to business firm by expanding the scope for obtaining fund.

Other functions of the stock exchange include the offer of guidance to the business management in relation to the present cost of capital so that the business man  can determine his level of investment appropriate  to the firm. Access to the  vast number of capital that are in very small amount of money that in their aggregate have s commend over vast quantities of wealth. It also make it possible for the transfer of funds that imposes only a minimum of administrative efforts he lender. By  this activity the  stock exchange is able to provide an avenue for long term investment to be financed by funds provided by individuals many of whom to make it available for a short term or with draw it at will.

The competitive nature of the stock exchange makes it possible to allocate funds efficiently which is achieved by the market ability to available companies securities in a manner based on the capitalized value of the company’s expected future earnings.

Apparently, only if stock are valued in this way will funds be provided most abundantly   and at most reasonable terms to the most promising innovation who accounting to the classical economic theory has the greatest use for them and who is the one that can obtain the profits which will serve as the investors rewards. And it in when shares are valued in relation to the  expected capitalized value of the firm that effective disciplinary advice which punishes management whose operation are inefficient or unprofitable.