Finance

The economy of Nigeria is one of the Africas biggest. This is a fact that explains partially the political significance of this country. It has a population of over 100million people making it large demographically thus facilitating a sizable workforce and domestic market. The climate variables ranging from savanna conditions in the north to the sparsely populated Saharan and the densely populated rain forest in the south have had a great impact on the agricultural produce and market.

In addition colonialism had a great influence on the marketing agricultural production and exports which had a huge impact on the shape of the political economy in 1988. In 1960s dramatic shift of economic profile took place being contributed by a number of factors (Nwankwo et al, 1980).Agriculture was replaced by petroleum as the major source of export revenue and this lead to the attraction of foreign investors into the countries, but most importantly not in regards to employment. Nigeria became the eighth largest oil producer in the world in mid 1990s.Regardless of this massive achievement social indicators revealed that quality of average citizens life remained to be poor.

Nigerias half of its citizen population lives below the poverty level that is a line of one dollar per day. The countries infant mortality and literacy rates are among the lowest in the globe. Despite the fact that petroleum has accounted annually for more than 90 export revenues and about 80  of the government revenues for the previous couple of decades, very diverse economic picture was outlaid before 1970s. Improbably as it approached 1980s the oil revenues began to decline thus the debt situation of the country worsened (Nwankwo et al, 1980).

The failing economy led to enforcement of higher concessions of IMF demands. Since 1988 the countrys economic performance has not matched its potential. Actually from 1970s its hard to explicate how the economic deteriorated to the level of its current condition. Revenues that were gained from oil were being squandered in the obscene corruption of the triumphant few or in the developmental projects that did not prove to be worthwhile. Instability,   bankruptcy economic plaque and uncertainty in the World Bank has consciously turned out to be the key player (Turner, 1999).

The formal financial system in Nigeria alongside other countries such as Kenya and Zimbabwe is the most spread out in sub-Saharan Africa. It is majorly comprised of a huge number of heterogonous associations under a mixed ownership. Coming to the end of 1992, Nigeria had 66 commercial banks, 401 community banks, 54 merchant banks all licensed under the central bank of Nigeria (Adesola, 2001).

Techno industrial innovation, manufacturing and market globalization provides a particular significance to the diverse types of networking. In comparison to the latter types of the international labor division, location participation is fewer warrens by product contribution than by contributing to the several production processes. These great processes are influential for the different ways and opportunities for the development of industries that can be noticeable in different locations. a more complex way of international labor division is being realized due to global tendencies in industrial development. Relocation of old and mature industries has brought about regional crisis in the traditional industrial sectors (Wooldridge, 1983). This industrial capability transfer provides the platform for more advanced industries to maintain costs under control as well as gain   competition capacity that is based on reduced production rates at locations where the suppliers and the investors are situated.

This hierarchical integration form lays its emphases on diverse costs of production and successful demands networking among areas that have different stages of industrial growth and development. Basing on the situation of competition and benefits achievement opportunities from the manufactures relocation there is a high likelihood of new industrial location integration (Sunder, 1973).

Despite the fact that there are modern ways of integration due to both processes of globalization and international production networks, this does not bring a comparison in the changes of industrial development. The succeeding key strategy at the locations established can be understood if the prevailing processes of global manufacturing of organizations are scrutinized at national strategies from techno industrial innovation. This is inevitable of process of picking the must suited cases for success (Griffin1977). The   already existing regional organization the new forms of development in industrial sector, the particular necessities of the new technology and the call for spontaneous realization of the process accordingly have no regard attempts at the development regionally

A regional expression can be noticeable from the development of certain industrial sectors. These sectors can also contribute to the basic formation of uneven economic development. Not forgetting the significance of public policies, the development of regional industries to greater extents puts into consideration the geographical expression of national industrial abilities. Most of the previous industrial developments come about again in relation the present innovations changes in the regionalized labor division takes effect in accordance to the new technology. The Nigerian government has to make sure that all the profitable resources of its country are useful for the development of regional industries. It should also develop full all it oil and gas resources in order to ensure that the country does recover from its economic sprawl (Shala, 1999).

Capital markets raise the amount of long term savings that is directed to long term investment (Oba, 1999).Capital markets enable the saving through such funds as provident funds and insurance policies this is a way of mobilizing long term finance from individuals who would otherwise have engaged in small savings that would not result to a substantial value if managed in such scale. In this way the finances are availed to the main financial users such as corporations who utilized them for projects that consequently promote the economy.

Capital markets also improve relations between the public and private sectors which in turn encourages participation of private sectors in development programs. Privatization has been one common way of ensuring efficiency in service delivery as resources to run these public projects diminish with time (Oba, 1999).Thus capital markets enable two very vital processes to take place, the first being improving efficiency among the public sectors through interactions in these markets this is greatly beneficial to the public sector which is thought to be inefficient. Secondly the markets aid in reducing the resource gap evident between the two sectors. Private sector has numerous capitals and if this is directed to the public sector major socio economic projects would get underway promoting the overall status of the economy.

According to recent release of empirical research capital markets help achieve economic milestones set by individuals or state governments. It is evident that countries who have a well developed and efficient capital market register a higher economic growth rate as compared to countries with an underdeveloped market. A good case of this assertion may be demonstrated in Africa where capital markets remain underdeveloped. This has stalled growth as the sectors both public and private do not have the means to improve their liquidity which would consequently improve investments (Smith et al, 2002). However in cases where countries in Africa have streamlined their systems or are at least making considerable progress in improving their capital markets growth is unquestionably visible and if such is maintained economic self sustenance for these countries is beckoning.

The contemporary economic theory with no exception commends the capital markets as the controlling mechanisms and financiers of the countrys capital system. Failures in the governmental owned enterprise finances and the less developed nations are mainly contributed by the lack of capital market restraints on their decadence. The major circumstance of equity market development, joint stock system of a firms ownership, became legal for industrial companies in the 1860s in the industrialized countries (Brown, 1978). However the function of this was not for the market creation that would enable capital switching among companies. But it was totally for the wealth principally landed old and upper class individuals.

In the case of absence of buyers, then the shares were eventually suspended and the company owners had to liquidate the company to retrieve their investments. Despite the fact that the capital market issue increases revenues the asset counter part of the capital market to some extend becomes a liability. for instance if a company bus assets for a certain amount of cash, the expected returns on them must be at least as good as the commitments made during the payments of the to the capital markets (Odife, 1984).

The development in capital market plays a fundamental element of the overall economic development strategy in 3 main reasons. First, Equity capital is a valuable cushion against different conditions and circumstances. Then equity capital markets are deemed to be more efficient compared to the bank-based debt markets. Lastly, inadequacy of direct financial markets and lack of terms in finance provision have brought about the high rates of inflation in the developing countries. The aggregate capital market growth is influenced by the stock market in two ways that is it raises the firm efficiency by removing the impulsive withdraw of capital from the firms, It ensures increase in liquidity of firm investments, reduction of productivity risk, improvement of firm efficiency, encouragement of firm investments (Odife, 1984).

This turns out the stimulation of human capital production and growth. They are encouraged to invest more by provision of opportunities to risk adverse investments. Exercising Capital Market will see Nigeria benefit in the industrial development sector by assisting the investors have the ideal protection against diverse external and internal factors that may lead to their investments infecting in the country (Odife, 1984).. Capital markets will lead to the provision of assurance to the investors that carrying out their business endeavors in the country will be a success.

The transference of resources from the savings is the main trust of capital markets.  If the capital markets are useful in facilitating fund transfers then these units are said to be efficient in capital markets, all the participants are price makers in an efficient market security. Efficient information here should be costless and is simultaneously received by all participants. When savers and investors enjoy minimum costs in the favor return of their services then the capital market is said to be operationally efficient. The Nigeria economic performance in a holistic manner has not yet reached to a point of matching its potential. This is not until the many financial and political issues are dealt with. Otherwise the long term confidence in the economy of Nigeria will remain unbalanced (Odife, 1984).. The industrial development in Nigeria centers its focus on the determination of making sure that the country will have enhanced relationship with the private sector.

The government wants to ensure that all the recourses present in the court that are profitable are used in the development of the economy. The stock exchange gives the major boost in the in economy development b serving as a measure of how well a country is performing in regards to the economy. It portrays the current position of the economy and how well its doing as well showing the direction of possible adjustments. Traders in the Nigerian stock exchange contribute the dominant group of clients for informal finance in both in the urban and the rural areas (Anyanwu, 1993). Nevertheless savings informal financial loans and consumption purposes are used by the traders Marjory for the smooth working of the capital investments of their commercial activities.

Efficient Market Hypothesis Evidence in Nigeria
 Efficient Market Hypothesis infers that prices of assets in financial markets should reflect all available information as a result prices should always be consistent with fundamentals. Carrying out this hypothesis is certainly the right turn to take when thinking about asset price formation. The evidence suggests that it cannot explain some vital and disturbing features of asset market behavior. Efficient market hypothesis is concerned with the characteristics of prices in the markets. The phrase efficient market was originally used to refer to the stock market, though later the idea was further generalized to other asset markets. It was introduced into the economics literature over thirty years ago to define a market the adjusts rapidly into new information (Fama et al 1969)

In the following years it became clearer that while rapid adjustment to new information is an element of an efficient market, the definition became less solemn. A more modernized meaning states that asset prices in an efficient market fully reflect all the information available. This indicates that the market develops rationally, in the sense that important information is not overlooked, and systematic errors are not committed (Fama et al 1969).

 As a result, prices are usually at same levels with the fundamentals consistently.
The efficient market hypothesis brings about a number of fascinating and testable predictions about the behavior of financial prices and returns. Thus, a wide amount of empirical research has been devoted to testing whether the financial markets are efficient. Nevertheless empirical analyses have consciously criticized efficient market hypothesis the most consistent problem noted is that stocks with low price earning out perform other stocks (Fama et al 1969). It has eventual become controversial because most of its theories are unsustainable and with lots of inefficiencies which are evidently observable.

A stock market has to be operational and efficient for it to perform the function for which it is established and to justify its raison deter. To be precise the raison deter is similar to the ability of determining  the share prices statement in order to reflect the full complete body of publicly information available about a certain companys prospect and performance. The efficient information must be available to the investors and stock brokers investors freely for rational profit maximization (Fama et al 1969). This is because an average investor will get an average return for the efficient price of earning and potential risk taken.

EMH emphasis on the fact that the todays price reflects all the current information is the most appropriate estimate for the best valued price of tomorrow. A freely operational function of an encumbered efficient stock market is the determination of that price. The interesting part of this type of socio-economic terms is to allow channeling of savings into the highly profitable capital and investment thus selected optimally. The Nigerian stock exchange is under developed and is far much behind from this type of characterization (Oba, 1999).. There is little and new public issues b the private firms leave alone the market lacking in depth.

Looking a the daily Nigerian stock exchange reports the prices hardly move .In comparison to the new York stock market and other advanced stock markets there should be a high connection between prices and volume in the measure of investors intensity and the price reactions. Market efficiency is made up by its in-depth broadness and subsequent high turn over of securities (Fama et al 1969). This is to that a market will always remain shallow and virtually inactive if the volume of securities is absent. Investors in Nigeria regards stock investments as  something for prosperity or to keep, in this philosophy the situation remain in a circular motion. This reduces volume and endangers shallowness in the market leading to few stocks in the market for transactions.

Moreover the mechanism of pricing usually takes place outside the free market concept. To make the matters even worse the prices approved do not always reflect the market values of the stock s in a fair way. This definitely leaves no doubt that in Nigeria the stock in a wide concept remains under valued. In such a case, unless something unexpected happens to a stock it cannot move either way for more than five percent. This makes it impossible for an enterprise to determine the true cost of capital and even be able to obtain a market rate of return

Efficient market hypothesis originated as a reputable theory in the 1960s.Eugene Fama in 1970 published a report reviewing the past theories and evidence for the hypothesis reflects the previous studies (Fama, 1970).  The report further and clearly explained the theory including its three forms of financial market efficiency that is weak form efficiency, semi-strong form efficiency and strong form efficiency

Weak form efficiency
It states that future prices cannot be forecasted by evaluating price from the past. Also surplus income cannot be madefinalby use of asset strategies determine by the previous divided prices. Proceduralmethods time and again will not be in the capability of coming up with excess returns, despite the fact that a number of  HYPERLINK httpen.wikipedia.orgwikiFundamental_analysis o Fundamental analysis fundamental analysistypes ma be able to do so. Share prices show signs of no sequential dependencies, that means that there no patterns to asset process. An indication that the price movement in the future are thoroughly determined by information but not from prices sequences (Fama, 1970).

For this reason, prices have to pursue an arbitrary amble. Weak form efficiency does not entail prices remaining near the balance (equilibrium), however market participants are not in position tosteadilyprofit from market  HYPERLINK httpen.wikipedia.orgwikiMarket_anomaly o Market anomaly inefficiencies. Nevertheless, although EMH foresees that all price movement is arbitrary for instance non-trending, studies have depicted that a spotted predisposition for stock markets to drift over a timeand there is an optimistic correlation linking the length of time period studied and degree of trending. Diverse enlightenments for the latter have been disseminated (Fama, 1970).  .
Semi-Strong-Form Efficiency

This depicts that an amendment to the overtly accessible novel information is very rapid and in an unprejudiced approach thus there is no absolute excess returns that can be grossed if such information was traded. Semi-strong-form efficiency shows that neither  HYPERLINK httpen.wikipedia.orgwikiTechnical_analysis o Technical analysis technical analysistechniques nor  HYPERLINK httpen.wikipedia.orgwikiFundamental_analysis o Fundamental analysis fundamental analysis has the capability to consistently fabricate excess returns. In order for a semi-strong-form efficiency to be tested, the modifications to the latter unidentified news have to be reasonably in size and should be immediate. To assessment this, steady upward or downward amendments have to be looked at after the initial change. In case of any amendments it would infer that investors had deduced the information in a prejudiced manner an inefficient way (Fama, 1970).

Strong-Form Efficiency
Here, share prices reveal all information, whether its public or private, and hence no one can make excess returns. Just incase there are lawful hurdles to private information turning out to be public, as in insider trading laws, strong-form efficiency is not possible, apart from where the laws are unanimously overlooked. To carry out a test for strong-form efficiency, a market requires being in the existence area where investors will not constantly earn excess returns over and over again. Where money managers are over and over again observed to beat the market, no repudiation even of strong-form efficiency follows. Having numerous fund managers across the globe, its likely that a customary supply of returns has to be expected in order to generate a hardly any star performers (Fama, 1970).

This paper discusses the efficient market hypothesis evidence in Nigeria. It focuses further evidence on the weak form efficiency of the Nigerian stock market. That is whether the asset prices on the Nigerian stock market adjust to historical price information. Nigerian stock market where subsisting Securities are sold and bought, the normal prices are arrived at by the stock brokers personnel (Olowe, 1977).. The pricing is determined by the supply and demand mechanism in addition to the information performance that is either documented in intermittent reports or a briefing by the   managing director of the company dealing with the stock exchange in Nigeria. However the marketer strengths outlay the secondary market prices. There are two ways of giving prices in a secondary market that is Qualitative aspect and quantitative aspect.

The quantitative aspects of pricing fairness securities revolves about carrying out a study of the company fundamentals by focusing at the records of its earnings, gross projection the structure of the assets, the dividend records of its growth, cash inflow and out flow, and use of mathematical models that have been developed to evaluate and value them. In normal cases these models are earnings and dividend based. Technical analyses is another method of secondary market pricing that uses statistical data, computer programs ad charts to recognize  and project the trends of prices in the stock market. They Marjory lay emphasis on the companys fundamentals unlike the fundamental analysts. In Nigeria there is a high doubt as to whether there are any technical analysts that exists (Erb et al, 1996).

The qualitative factors that influence the stock brokers during the pricing process comprise of future judgment of the companys direction, the quality of management judgment, the quality of the companys products, and the companys technological superiority in comparison to their competitors in addition to the high quality marketing teams. Focusing on the latter, it can be deduced that stockbrokers requires substantial and uninterrupted flow of information in regards to each stipulated company so as to have the capability of pricing their shares in an unbiased manner. some companies in Nigeria that are frequent in the stock exchange market have vehemently complained that their shares are grossly undervalued .these companies include John Holt Plc, Uac Plc and many more (Bekaert, 2002).The main grouse being that stockbrokers are not adequately proverbial with their activities so as to ensure that the carry out the pricing process in a fair manner. This brings about the question of whether theres available information to the stock brokers or whether that stock brokers are able to interpret the information available in the right manner during pricing process.

The Nigerian stock market has placed a maximum movement on the price securities in order to avoid volatility of price movement. Before 1995, prices moved up or down in any single day by ten points but later in 1995 the maximum permissible movement in the price increased by 20points. In April 1970 onwards the maximum movement in the price of a security in any single day on the Nigerian stock exchange is 5 of the market price subject to a transaction volume of 5000 shares.

The ideal question here is to determine efficient market hypothesis evidence in Nigeria. The three types of efficiency defined by Fama (1970), each clearly bases on a different notion of exactly what type of information is derived to be appropriate to security prices (Samuels and Yacout, 1981).The Nigerian stock marker is a weak form of efficient However, practitioners and other writers which are not backed up by any form of empirical work show that the Nigerian stock market is inefficient. They identified some of the significant factors that prejudiced the development of African capital markets. These factors among others included poor information disclosure, questionable pricing formula, lack of liquidity.

The implication shows that African stock markets can hardly be termed as efficient. The Nigerian stock market is characterized by none trading for some quoted securities. The purposes of weekly or daily stock prices appear to produce to many observations of prices no change. Never the less it would be of great concern to examine the further weak form of efficiency of the Nigerian stock exchange market using monthly data.

Weak form efficiency evidence in Nigeria
Weak form efficiency tests deals with whether or not security prices fully reflect the return information or the historical price. The weakly efficient market is usually an essential repudiation of technical analysis. This tends to assert that market prices are not an unsystematic process. It is usually expected that changes in the price are not independent from the previous distributions. Market prices are bound to be repeated since they exhibit identifiable patterns. The skill is found underlying in formulating the correct methods and techniques that can identify trends, carry out interpretation on an deviation emanating from them (Mlambo et al, 2003). In weak efficient market the volume data and the past price are normally confiscated in security prices and no amount of chart reading and others no other trading device that is likely to beat that buy and hold strategy.

In the earlier literature discussions of the efficient model it was termed in phrases such as Random walk, even though Fama brought an argument later that the previous authors of the theory were as a matter of fact concerned generally with matters of fair game model The weak form of efficient market must hold through as the random walk model holds though the vice versa should not be encountered. Hence its easily deduced that the evidence supporting random walk model is the same evidence supporting weak efficient market.

In order to prove that securities markets are efficient in a weak form. There is need for one to show that successive changes in price are independent. Some tests on the randomness of prices were carried out in the earlier years but Kendall and Osborne in 1953 and 1959 respectively. Kendall investigated the characteristics of weekly changes in 19 indices of British industrial share prices, also in spot price of wheat and cotton both in Chicago and New York respectively. After a vast investigation and analyses of serial correlations, he concluded that the characteristics of prices were same to the end results from a roulette wheel.

Osborne carried out a hypothesis thats states that stock prices follow a Brownian motion similar to that characterizing the movement of very small particles suspended in a chemical solution. His results confirmed the validity of the hypothesis. This means that stock prices in deed follow a random process. These two studies show that weak form efficiency has been tested by use of technical trading rules and correlation studies.

Most of these test discussed have above have been used to conduct analyses on the United States of America and the United kingdom stock markets. Few of them have been used to determine the efficiency of the Nigerian Stock Markets. Two writers known as Yacout and Samuel were the first to carry out a research on efficient market hypothesis in Nigeria in 1981 (Fama, 1985) .They used the weekly price shares to determine the estimates of serial correlations coefficients for a sample of twenty one listed companies in Nigerians stock exchange over a period of one year that is from July 1978 to July 1979.A dependence trace was discovered with one week pauses. That was in only seven companies plus with two week pauses in only for companies conclusion was made that said that the Nigerian stock exchange market is efficient in the weak form.

Another researcher made use of Non parametric tests to carry out test on the hypothesis that succeeding weekly changes in prices are independent in a sample of the quoted companies on the Nigerian stock exchange over the period three years that is from January 1977 to December 1980.His findings outlaid that 83.3  of the listed companies in the sample he was using abided with the hypothesis that succeeding changes in price were independent. That way it can be concluded that his results shows that the weak form of efficient market hypothesis is evidence in Nigeria (Adesola, 2001).

In addition  ,the to date evidence especially in developed countries such as the united states of America or the united kingdom indicates strongly that a pattern in historical returns cannot be   made use of so as to gain excess return, thus,  showing clearly the support the weak form of inefficient market analyses.

Nevertheless as discussed earlier other writers and practitioners viewed or had held an implication that the Nigerian stock market is inefficient. Yahannes in 1964 investigated the inefficiency in Nigeria market paying respect to the information on the money     supply, the real economic activity rate of inflation, the oil prices using the information approach to casualty theory and the interest rate His conclusion did not show tea efficiency of Nigerias     stock market(Adesola ,2001)..

The Nigerian stock exchange market is characterized by the- none trading for some listed securities. Using the daily and the weekly stock prices seems to yield very many observations of no change in the prices.  This lead to a writer called Olowe.R in 1999 to carry out a research that provided further evidence on the weak form efficiency of the Nigerian Stock exchange using the monthly data instead of daily and weekly basis as compared to the Samuel and Yacout studies. The data consisted of an end month quoted stock prices of 59 randomly selected securities listed from a period of eleven years that is from January 1981 to December 1992 on the Nigerian stock   exchange. The sample was chosen in a manner that it would capture the industrial effect (Olatunji, 1998)..

Making use of the monthly data the Nigerian stock exchange market seemed to be efficient in the weak for. This finding provides support to the previous studies carried on the same. Therefore the implication of the evidence can be clearly noted that the use of technical analysis or any other form of security analysis based on the historical prices seems to of no value in Nigeria. It can be deemed that security prices constantly fiddles with the historical information. When the writer engaged into conversation with the stock market operators in Nigeria he learnt that the following problems were the major contributors to the pricing inefficiency in the Nigerian stock Market Inadequate information flow in the stock market, Inadequate understanding f financial communication system, Inefficient communication systems, Inadequate skills among the Nigerian stock brokers, Low level of automation in the country, and the interference by the regulator authorities in the determination of secondary market prices(Asal, 2000).

However suggestions have been made that efforts should be made by the stockbrokers and the regulator authorities. This will enhance the pricing efficiency as well as improve allotment efficiency of the market. Recommendations such as improvement in the automation of the stock markets, enhancement in the available knowledge of the stock brokers in the dynamic modern security analysis and management of portfolio as well as improvement of the Nigeria telecommunication Plc .These recommendations should be put into practice so as to ensure that efficient market in Nigeria picks up and can be ranged among other developed nations such as the United States of America (Olatunji, 1998)..

Conclusion
Understanding the market efficiency nature is very important to the investors who are trying to find out whether there are any opportunities of market excess return has some existence in a given stock market. When a market is efficient, no chances of arbitrage opportunities can   take over to make excess profits as all the available information has been discounted in the current prices (Bowie, 1994).

In regards to the studies depicted from the above discussion Nigeria follows a random walk and its therefore weak efficient. This implies that the expectation about overvaluation or undervaluation of stock prices in the market is out of question. Thus making it a waste of time for investors to continue studying and charting in the investigation of the undervalued stock in the Nigerian stock market (Moss, 2004). The Nigerian capital market is weak form efficient and does not allow the opportunity of making excess returns.


Taking into consideration the favorable condition of the wavering interests and governmental rate of the performance the Nigeria capital market all markets can be enhanced if the investors and the stock brokers continue ton create high awareness of all happenings and their remedies (Ariyo et al, 1985). This will see the Nigeria stock market get into a position where it can be compared with others of developed counties such as the United Kingdom or Japan. Operation of the Nigerias stock market leans on in a very large way on maintenance of strict discipline with regards to its profession as well as on the degree of freedom permitted in the exchange dealings with pricing of securities.

Depending on the successful analysis, its strongly believed that the Nigerian stock market comprises of an essential purpose intermediary in the financial system of the country. It is also noted that if correct measures were undertaken to rectify the identifiable problems in the market it will with no doubt continue to give access to substantial more funds in the exchange. Its significant to accept the fact that the Nigerian stock market interacts accordingly with the environment since it is an open system. Its extent   to satisfy the expected roles depends on its specific conditions of the exchange and constituted organizations (Anyanwu, 1993).

At all levels of Nigeria economic growth, huge dependence on the stock market has been placed on it as a channel of interaction which constitutes the long term exchange funds within the countrys units of economy in order to realize maximum flow and to increase growth and investment. For Nigeria stock Market to realize there is a number of factors that have to be considered. There has been hastening of one of the developmental functions f the Securities and Exchange Commission in the rate of investment. Focusing on the Nigerian Context, there is need for public enlightenment on this. The activity has been relatively passed in few urban centers over a period of time. A major enlighten that is purposive should be performed in a wide and far content so as to awaken the interest of latent public investors who stay outside the major cities(Ariyo et al, 1985). These latent investors may also have wishes to make available to the opportunities of carrying out investments in firms through stocks and shares.

Another factor that is a great hindrance to the development and growth of Nigeria stock market is the infrastructural inadequacies. The reason behind this is that information dissemination according to the stock market is skillfully low in comparison to the developed nations. A designed and tactful manner of disseminating information that supports proper monitoring should be formulated. The government should be in a position to fund and finance the development banks (Bowie, 1994). This will allow them to source funds in to the stock market as well as reducing their dependency level in the allocations of budgetary.

Utilization of resources effectively and reduction of cost of capital is the main core focus product financial management and it revolves the exploration of funds appropriately. The government should take responsibility in the allocation of floatation and quotation associated of its price securities that can be reduced from the income tax of the company (Bowie, 1994). There is a high recommendation that the initial market on the stock exchange must look for a way of relaxing some of the requirement listing that are needed to both the first and the second tier of the market securities.

The government should enforce and the encouragement of investment of supply funds by very importantly making sure that they have reduced the rate of personal taxation. This will ensure insensitive acquisition of wealth creation among the Nigerian citizens. It is also the duty of the government to control interest rates thus helping in the development and growth of the stock market.