TABLE OF CONTENT
TABLE OF CONTENT
CHAPTER ONE: INTRODUCTION.
1.1 Background to the Study
1.2 Statement of the problem
1.3 Objective to the Study
1.4 Research Question
1.5 Research Hypothesis
1.6 Scope and Limitation of Study
1.7 Significance the Study
CHAPTER TWO: LITERATURE REVIEW
2.1 Investment in Securities
2.2 The Efficient Market Hypothesis
2.3 The Weak Form
2.4 The Semi- Strong Form
2.5 The Strong Form
2.6 Arbitrage Pricing Theory (APT)
2.7 Stock price and Macro Economic Variable
2.8 Stock prices and Inflation
2.9 Stock Prices and Exchanges Rates
2.10 Stock Prices and Money
2.11 The Nigerian Stock
CHAPTER THREE: RESEARCH METHOD
3.1 Research Design
3.3 Sources of Data
3.4 Primary Data
3.5 Secondary Data
3.6 Sampling Design
3.7 data Collection Instrument
3.8 Administration of Data Collection Instrument
3.9 Procedures for Processing and Analyzing Data
3.10 Limited of the Methodology
CHAPTER FOUR: DATA ANALYSIS
AND INTERPRETATION OF RESULT
4.1 Analysis of Section A-Response of Respondents
4.2 Analysis Section B-Analysis of Questionnaire
4.3 Test of Hypothesis
CHAPTER FIVE SUMMARY OF
RECOMMENDATIONS AND CONCLUSION
5.1 Summary of Major Findings
1.1 BACKGROUND TO OF STUDY
The banking of any country constitutes a crucial
instrument for economic growth and development. It provides a vehicle for the
mobilization of fund from the saving surplus sectors of an economy to the
saving deficit sectors. According to Duoglal and Gambits (1986) Capital Market
comprises of institutions and mechanism through which intermediate and
long-term fund are pooled and made available to business, government and individuals. This allocate role of
the capital market is vital for the overall development and growth of an
economy. In respect of the vital roles as the capital in an economy many
countries including Nigeria have established or facilitated the established of
the capital markets.
These consists both the primary (New Issue) market and
secondary (Stock). The history of the Nigeria capital market dates back to 1946
when the first public issue of securities was stated by the federal government
of Nigeria for infrastructure development.
More so, a lot of development has taken place in the
Nigeria capital market, for example the Lagos Stock Exchange was incorporated
in 1961 as a non-profit organization limited by guarantee. It was later renamed
the Nigerian Stock Exchange (NSE) in 1977. For now, there are nine branches of
the Nigerian Stock Exchange located in F.C.T Abuja, Lagos, Kaduna,
Port Harcourt, Kano, Ibadan, Onisha, Yola and Benin City.
The objective of the NSE as contained in its memorandums and Article of
Association include among others the provision of facilities for trading in
securities and ensuring fair and equitable prices for securities.
It is significant to note that the Nigeria Securities and
Exchange Commission (SEC), which is the apex regulatory body for the Nigeria
Capital Market, was established in 1979. The SEC evolved from the capital issue
commission which was created in 1962 to regulate the activities of the Nigeria
Capital Market by protecting investors through orderly fair and equitable
dealing in the market.
Going by the age of the Nigerian Capital Market one can
claim that the market is far from being adequate. As recently observed by Alile
(1994) "lack of adequate long term capital for economic development has
been a lane of African economic" including that of Nigeria. He therefore
opined that fund must be effectively mobilized to enable these economy use
Capital Market developments as a potential conduct for channeling longterm
fund to productive sectors.
Moreover effort of improving the Nigeria Capital Market
the Federal Government of Nigeria (FGN).recently set up a panel (headed by
Odifa) to look into the activities of the market. One of the most fundamental
issues of the Nigerian Capital Market is the pricing of securities. There has
been disenchantment with the pricing mechanism and the manipulation of share price
movement in the Capital Market in 1993 the SEC role in price determination was
taken away and handed down to the stock brokers and issuing houses as
enunciated in the 1993 Budget pronouncement and contained in SEC circular
reference SEC/60/1/93. This government
decision was as a result of the continuous criticism of the pricing mechanism
of SEC which was perceived as unfair to the investing public. The accurate
pricing of securities is of vital important if it is to provide a credible
vehicle for the efficient allocation of scarce resources and in tum making the
Capital Market a major determinant country growth and development given the
importance of appropriate pricing of securities in the Nigerian Capital Market,
studies are required to ascertain the impact of certain macro-economic variable
on stock share prices movement in the Nigerian Capital Market. For instance, it
has been argued that macro-economic variables such as interest rates, inflation
rate, foreign exchange rates and money supply may affect stock price movement
although the extents of the effect in still a matter of conjunction.
The main focus of this study is to investigate the extent
it affect macro-economic variables such as interest rates, inflation rates,
foreign exchange rates and money supply on stock price movement in the Nigerian
1.1 STATEMENT OF THE PROBLEM
The securities in the banking sector has been a major
area of concern to the market participants and (observers) all and sundry. It
has also been growing concern emphatically by financial analysis and economist
on the determinant of stock prices. In the Nigerian Newspapers particularly the
financial standard, captions such as pricing of securities queried and
frivolous pricing worries shareholders are reflection of public concern and
disenchantment about stock pricing in the Nigerian Capital Market.
Meanwhile reflecting the views of an observes, Daily
times of Nigeria (1995) has urged stock brokers to reflect through appropriate
pricing of securities the real value of quoted companies _ during a period of
inflation and massive devaluation of the National currency to make prices of
equities in the country complete with those in other international exchanges.
Also the effect of their macro-economic aggregates such as inflation rates,
exchange interest rate and money supply are mostly important.
1.2 OBJECTIVES OF
The objective of this study is to- determine the
performance of the financial institution on the micro-finance institution. When
the performance is independent variable and microfinance is the dependent
variable as to determine the employment rate, sales, Lending services, control
of cash flow, savings
To determine if
savings rate enhances employment rate
To evaluate whether
lending services increase employment rate
To determine if the
control of cash flow enhances sales
The relevant research questions to address in this study
are as follows:
Does savings rate
enhances employment rate?
services enhances employment rate?
Does control cash
flow. enhances sales
Since the objective of this study is to examine the
relationship between the variables and the study makes a set of testable
The Null hypotheses, Ho and the Alternative hypotheses
Ho: Savings rate does not enhances employment rate
Hi: Saving rate enhances employment rate
Hi: Savings rate enhances employment rate Hi:
Saving rate enhances employment rate
Ho: lending services does enhances employment rate
Hi: Lending service enhances employment rate.
Hi: lending services enhances employment rate Hi:
Lending service enhances employment rate.
Ho: Control of cash flow does not enhance sale
Hi: Control of cash flow enhance sale
AND LIMITATION OF STUDY
This study covers the nature of working capital
decisions, the management of the components of working capital and the
relationship between working capital management and the profitability of
Cussons, PIc. It also covers the relevance of the firm's
liquidity and profitability and lastly, the important consideration in the
management of working capital of Patterson Zochonis Cussons, PIc.
The major limitations encountered in this study are time
and financial constraint and lack of timely response from interviewers. In
addition, there is no existing adequate data base from which to draw relevant
information thereby causing adhoc in the course of the project.
The capital market is to facilities a conducive business
environment with an efficient and dependable Mechanism through which long-term
financial instruments can be raised and traded. As economic develop, business
organizations will need long-term finance for long-term project execution of
fixed asset acquisition among others, for which long-term funds are required.
Capacity to effectively mobilize such long-term funds no
doubt calls for efficient and appropriate pricing of Securities in the Nigerian
Capital market so as to elicit the required response from the investing public.
An empirical study is therefore necessary to examine the macroeconomic variable
which can affect stock prices in the industrial sectors of the Nigerian
Capital Market. This will provide necessary guidance for
policy decision market, brokers and issuing houses who are involved with the
pricing of shares. Likewise, existing studies on the impact of macroeconomics
variable of stock prices were done on yearly and quarterly bases and they were
not analyzed on Seefoval bases.
For Instance Soyoye (1991) and Yohannes (1994) undertook
aggregate analysis of the impact of macroeconomic variables on stock price
movement documented up to (1989). Also using quarterly data, Amoye (1994) analyzed
on the effect of inflation on stock price movements in Nigeria. Here the
research shall fill this gap by analyzing the determinant of stock prices movements both in the aggregate
and by sector and the impact across selected industrial sectors of the Nigeria
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