Predictability of Stock Price on Nigeria Stock Exchange

In: Business and Management

Submitted By adebayoadisa
Words 11803
Pages 48
predictability
CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND TO THE STUDY

The performance of an economy is dependent largely on the efficient performance of its financial markets, since they facilitate the financing of productive activity and hence national output and economic growth. In this research report, the key roles and function of the financial markets are highlighted with the thrust of the discussion on the core issue of how the market works; directly and indirectly.
One of the most important factors for rapid economic development is the effective mobilization and allocation of scarce resources within an economy. These resources can be real or financial, but they are scarce and command a price. The establishment of effective and efficient channel for the mobilization and allocation of scarce financial resources is therefore essential.

The financial market, comprising of the money and capital markets, occupies an important place in most economies of the world. The primary function of a financial market is to enable funds to be sufficiently allocated from the surplus units of the economy to the deficit units for productive investment. The greater the transmission efficiency is, the higher the rate of growth of the economy (Olowe, 1997).

The money market trades only in securities or debt instruments maturing in less than twelve months, while in the capital market, longer term debts as well as equity instruments are traded. The complementarity between money market and capital market is necessary for a balanced development of the financial system. (NSE Fact Book 2010)
The money market is a market for the mobilization, allocation and trading in short-term funds. It is, thus, a market for trading in short-term financial instruments. The major participants in the money market include individuals, companies, banks, discount houses and government.

The…...

Similar Documents

Stock Exchange

...04 ▪ Capital market …………………………………… pg.04 Market infra structure 2. Stock exchange………………………………………………... pg.05 ▪ Introduction…………………………………….. pg.06 ▪ History………………………………………….. pg.06 ▪ Securities……………………………………….. pg.07 ▪ Types of operation……………………………… pg.08 ▪ Trading process in S.E………………………….. pg.09 ▪ Role of S.E……………………………………… pg.10 ▪ Listing of securities in S.E……………………… pg.12 ▪ Ownership of S.E……………………………….. pg.14 ▪ Future of S.E……………………………………. pg.14 ▪ Other types of S.E………………………………. pg.15 3. Functions of stock exchange………………………………. pg.16 4. World major S.E…………………………………………….. pg.21 5. Stock exchange of Pakistan…………………………….. pg.23 ▪ Karachi stock exchange (K.S.E)………………. pg.24 ▪ Lahore stock exchange (L.S.E)………………… pg.30 ▪ Islamabad stock exchange (I.S.E)……………… pg.32 1. Over view of market Over view of market 1. Market:- ▪ A public place where buyers and sellers make transactions, directly or via intermediaries. Also sometimes means the stock market. ▪ A market is a public place where provision and object are exposed for sale. 2...

Words: 8645 - Pages: 35

History of Stock Exchanges of Bangladesh

...History of Stock Exchanges of Bangladesh Dhaka Stock Exchange: The necessity of establishing a stock exchange in the then East Pakistan was first decided by the government when, early in 1952, it was learnt that the Calcutta Stock Exchange had prohibited the transactions in pakistani shares and securities. The provincial industrial advisory council soon thereafter set up an organizing committee for the formation of a stock exchange in East Pakistan. A decisive step was taken the second meeting of the organizing committee held on the 13th march, 1953. In the cabinet room, eden building, under the chairmanship of Mr. A. Khaleeli, secretary government of East Bengal, commerce, labor and industries department at which various aspects of the issue were discussed in detail. Then the central government’s proposal regarding the Karachi Stock Exchange opening a branch at Dhaka did not find favour with the meeting who felt that East Pakistan should have an independent stock exchange. It was suggested that Dhaka Narayanganj Chamber of Commerce & Industry should approach its members for purchase of membership cards at RS.2000 each for the proposed stock exchange. The location of the exchange it was thought should be either Dhaka, Narayanganj or Chittagong. An organizing committee was appointed consisting of leading commercial and industrial personalities of the province with Mr. Mehdi Ispahani as the convener in order to organize the exchange. The chamber informed its......

Words: 1261 - Pages: 6

Stock Exchanges in India

...What is Stock Exchange? Meaning Stock Exchange (also called Stock Market or Share Market) is one important constituent of capital market. Stock Exchange is an organized market for the purchase and sale of industrial and financial security. It is convenient place where trading in securities is conducted in systematic manner i.e. as per certain rules and regulations. It performs various functions and offers useful services to investors and borrowing companies. It is an investment intermediary and facilitates economic and industrial development of a country. Stock exchange is an organized market for buying and selling corporate and other securities. Here, securities are purchased and sold out as per certain well-defined rules and regulations. It provides a convenient and secured mechanism or platform for transactions in different securities. Such securities include shares and debentures issued by public companies which are duly listed at the stock exchange, and bonds and debentures issued by government, public corporations and municipal and port trust bodies. Stock exchanges are indispensable for the smooth and orderly functioning of corporate sector in a free market economy. A stock exchange need not be treated as a place for speculation or a gambling den. It should act as a place for safe and profitable investment, for this, effective control on the working of stock exchange is necessary. This will avoid misuse of this platform for excessive speculation, scams and......

Words: 1951 - Pages: 8

Dse- Dhaka Stock Exchange

...With all the views and perspectives Dhaka Stock Exchange is the first Stock Exchange in Bangladesh. It was established by the East Pakistan in 1954.It is located at Motijeel in Dhaka. Now Bangladesh has two stock exchanges one is DSE that is Dhaka stock exchange and another is CSE that is Chittagung stock exchange.DSE and CSE is playing a vital role in stock exchange business. It has been putting a great contribution in national economy of the country. The educated people of the country is investing their money in the stock exchange market rather than saving in the banking institutions. So people of the country are getting a smooth benefit from share market. Because of that they are investing their money in the stock exchange market. From this report we got that most of the people knows something about the share market and they are doing this business earnestly. 1.INTRODUCTION Dhaka Stock Exchange (Generally known as DSE) is the main stock exchange of Bangladesh. It is located in Motijheel at the heart of the Dhaka city. It was incorporated in 1954. Dhaka stock exchange is the first stock exchange of the country. A 24 members council is managed and operated the function of DSE. Among 24 members, 12 are chosen DSE members and the remaining 12 are chosen from the following position: Bangladesh Bank Commerce Ministry Finance Ministry Law Ministry Industries ministry President of Institute of Chartered......

Words: 2551 - Pages: 11

Stock Exchange

...RESEARCH SYNOPSIS/PROPOSAL Relation between the stock market and GDP Submitted by: Abstract: This research will analyze the stock market earnings impact on the GDP growth of a developing country i.e. Pakistan. This study will help to establish a relationship between stock market earnings and economic (GDP) growth of the country, basically it will answer this question, “How the stock market earnings affect the GDP?” In this research, I shall apply the co integration and error correction model to the stock market performance and GDP and shall try to segregate the role of primary from secondary market and find out linkages between secondary market and growth that may impact on GDP of Pakistan. I shall make an effort to find indicators that lead to growth by having stock market earnings at the back. Table of Contents with List of Tables and/or Illustrations Serial number|Description|Page numbers| 1|Title|i| 2|Abstract|ii| 3|Table of contents|1| 4|Introduction|2| 5|Research Question|3| 6|Research Objective|3| 7|Literature Review|4| 8|Significance|5| 9|Research Methodology|6| 10|Data Collection Sources|6| 11|Data Collection Tools|6| 12|Hypothesis|6| 13|Research Model|7| 14|Theoretical Framework|7| 15|Type of research|8| 16|Sampling technique|8| 17|Data processing, analysis and statistical tools|8| 18|Reference|9| Theoretical framework Illustration…………………………………….7 Introduction: GDP is the key indicator of the economic growth of a developing......

Words: 1944 - Pages: 8

Stock Exchanges in India

...STOCK EXCHANGES IN INDIA Module Objectives The main objective of this module is to explain the structure of organized exchanges for trading in stocks, commodities and derivatives. The features of derivative instruments like forwards, futures, options and swaps are also described. Module Contents 5.1. Stock Exchanges 5.2. Commodity Exchanges 5.3. Derivatives 5.4. Currency Futures in India 5.1 Stock Exchanges in India 5.1.1 History and Development Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years ago. The earliest records of security dealings in India are meagre and obscure. The East India Company was the dominant institution in those days and business in its loan securities used to be transacted towards the close of the eighteenth century. By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers recognized by banks and merchants during 1840 and 1850. The 1850's witnessed a rapid development of commercial enterprise and brokerage business attracted many men into the field and by 1860 the number of brokers increased into 60. In 1860-61 the American Civil War broke out and cotton supply from United States of Europe was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump began......

Words: 20281 - Pages: 82

Chittagong Stock Exchange

........ Department of Accounting, Gachhbaria Govt. College, Chittagong. Subject: Submission of Term Paper Dear Sir, We are very pleased to submit the term paper on “Chittagong Stock Exchange; An Evaluation of the Operation, Problems and Prospects”. We were assigned to prepare and submit this term paper as the partial fulfillment of the course entitled BBA. We have tried our best to prepare this term paper perfectly. Nevertheless, this paper has been suffered by time and cost limitation. We will be obliged, if you kindly accept this term paper. We are ready to make you clear regarding any confusion or further clarification from this term paper. Yours Sincerely ..................................... PARUL AKTER BBA (Hons) 2nd year Roll: 8095336 Reg: 2112555 Class Roll: 1164 Session: 2011-2012 Department of Accounting, Gachhbaria Govt. College, Chittagong. Acknowledgement This is a great privilege for us to finish the report in due time. During the preparation of this report we have received generous help from many individual’s which we would like to mention with our deepest gratitude. First of all, we like to thank ..........................., Lecturer of Accounting Department for granting us this great opportunity to work on this subject, “Chittagong Stock Exchange; An Evaluation of the Operation, Problems and Prospects”. We have earned a lot of experiences while preparing the report and also learned. The entire development of the study has......

Words: 6463 - Pages: 26

Stock Exchange in Germany and Poland

...Microeconomics "Stock exchange in Germany and Poland" Content 1 Introduction 2 Stock exchange and corporate capital needs 3 Regulation of the stock market in Germany and Poland 4 Stocks and Bonds 4.1 Stocks 4.2 Bonds 4.3 Corporate choice between stocks and bonds 5 Share Market Value 6 The History of the Stock exchange in Germany from Frankfurt 7 The History of Stock Exchange in Poland 8 The Frankfurt Stock Exchange 9 The Warsaw Stock Exchange 10 The DAX at the Frankfurt Stock Exchange 11 The WIG on the Warsaw Stock Exchange 12 Stock market indexes compared 13 Conclusion 14 References 1 Introduction “Stock exchanges deal with a number of financial instruments such as stocks, bonds and equities. Both corporate and government bonds are traded in stock exchanges. Every day, stocks are exchanged and traded in numerous international stock exchanges around the world. Stock Exchanges are open markets that trade financial assets. So, the main function is to ease the transactions for buying and selling of securities. Stock exchanges also serve as a source of capital formation for listed companies. Whether associated with a company or acting as an individual, a stock exchange is the place where stocks are bought and sold. The actual trading of stocks takes place through mediators such as financial advisors, brokerage houses, and stockbrokers. There are a number of major stock exchanges around the......

Words: 3730 - Pages: 15

Momentum on Johannesburg Stock Exchange

...Investigating Momentum on the Johannesburg Stock Exchange December 1 2010 Hendrik Snyman 14422425 A dissertation submitted in partial fulfilment of the requirements for the degree of Master of Science in Engineering (Management) Department of Industrial Engineering University of Stellenbosch An oil prospector had died and gone to heaven. At the gate, he is met by St Peter.‘Well, I checked you out and you meet all of the qualifications. But there’s one problem,’ He said. ‘We have some tough zoning laws up here, and we keep all of our oil prospectors over in that pen. And as you can see, it is absolutely chock-full. There is no room for you.’ And the prospector said, ’Do you mind if I just say four words?’ St Peter said, ‘No harm in that.’ So the prospector cupped his hands and yelled out, ‘Oil discovered in hell!’ And, of course, the lock comes off the cage and all of the oil prospectors start heading straight down. St Peter said, ‘That’s a pretty sick trick. So,‘ he says, ’go in and make yourself at home. All the room in the world.’ The prospector paused for a minute, then said, ‘No, I think I’ll go along with the rest of the boys. There might be some truth to that rumour after all.’ 1 1 Janet Lowe, The Rediscovered Benjamin Graham: Selected Writings of the Wall Street Legend, Wiley, 1999. I|Page Dedication This dissertation is dedicated to all those people who provided moral and financial support along with particular insight into the weird and......

Words: 14511 - Pages: 59

Singapore Stock Exchange

...Introduction With an uncountable range of investment options one might think of why to go to a stock market, bein reputed as one of the most riskiest options it has proved to provide some with a larger value than of what they invested. This is a market in which shares of publicly held companies are issued and traded either through exchanges or over-the-counter markets. Also known as the equity market, the stock market is one of the most vital components of a free-market economy, as it provides companies with access to capital in exchange for giving investors a slice of ownership in the company. The stock market makes it possible to grow small initial sums of money into large ones, and to become wealthy without taking the risk of starting a business or making the sacrifices that often accompany a high-paying career. This report will help provide a comprehensive insight on the Singapore Exchange (SGX) and its market indices, moreover it goes on to include historical milestones, the financial products that is made available to the public by the bourse, its profile of listed companies, market statistics and recent performances of the market. Singapore Exchange (SGX) The Singapore Bourse was formed on 1st Decemebr 1999, serving as a frontline regulator for the markets and clearing houses that operates in Singapore. SGX works closely with the relevant regulatory authorities, including the Monetary Authority of Singapore (MAS) and the Criminal Affairs Department (CAD), to......

Words: 2692 - Pages: 11

Stock Exchange of Bangladesh

...An Analysis On The Role of Bangladesh Securities and Exchange Commission Course Name : Financial Institution and Market Course Code: Fin-335 , Sec: 1 Prepared for Prof. Tanvir Ahmed Chowdhury Chairman, Department of Business Administration East West University Prepared by Holistic Heroes Submission Date: 25th March, 2014 Group Profile Department Of Business Administration Letter of Transmittal 25th March 2014 Prof. Tanvir Ahmed Chowdhury Chairman Department of Business Administration East West University Dear Sir, It gives us immense pleasure to present our term paper on the topic “ An Analysis on Bangladesh Securities and Exchange Commission, for the course Financial Institution and Market (FIN_335). By doing this paper we have learned a lot practical issues regarding BSEC , Capital Market, Stock Market, Bond Market etc and we think that will help us in our near future. We would like to thank you for your valuable guidance in every problem we had the precious time that you give us. We will be available for any further clarification required and requesting to accept our term paper. Thank you Sincerely All the Members of Holistic Heroes Syed Md. Fakruuddin Nahid Hasan Sayma Sultana Al Mumtahina Shuovy Asma Sultana Nusrat Sharmin Eva Table of content | Page no | Introduction | 6 | 1.0.0 Bangladesh Securities and Exchanges Commission | 7 | 1.2.0 Function of BSEC | 9 | 2.0.0 Capital...

Words: 13552 - Pages: 55

Stock Exchange

...local branch in 1963, then expanded beyond Philippine shores only a few years after its establishment. Metrobank rolled out its first international branch in Taipei in 1970 and a representative office in Hong Kong in 1973. In 1975, Metrobank became the first of the private banks to move into American territory when it opened its office in Guam. It later established branches in the United States mainland cities of Los Angeles and New York. It established Metrobank Foundation, Inc. in 1979, putting emphasis on both business success and community contribution. The Foundation has since become one of the largest and most respected charitable organizations in Asia. In 1981, Metrobank was listed in the Philippine Stock Exchange and acquired its universal banking license, gaining significant equity ownerships in local and international subsidiaries. It established its own credit card company, Unibancard Corporation (now Metrobank Card Corporation) in 1986. In 1988, Metrobank entered into a joint venture with Japan's largest automotive manufacturer and Mitsui Corporation to establish Toyota Motor Philippines Corporation. A decade later, it partnered with another global giant, the AXA Group, to give birth to Philippine AXA Life Insurance Corporation.  In 1990, Metrobank launched the country's first and only talking ATM, Metrobank E.T. In 1995, Metrobank became the first billion dollar bank with total capital of Php22.8 billion, the......

Words: 867 - Pages: 4

Issues of London Stock Exchange

...I. History of London Stock Exchange A. Early days (1693—1801) 1. Coffee House The early history of the London securities market can be traced back to the seventeenth century. A broker called John Castaing began to issue a list of stock and commodity prices called “The Course of the Exchange and other things” at his office in what was known as Jonathan’s Coffee-house. It is the earliest evidence of organized trading in marketable securities in London. 2. Royal exchange This is something similar to the exchange that we see today. The Royal Exchange not only housed brokers but also merchants and merchandise. However, this was the birth of a regulated market and, as such, had its teething problems in the shape of unlicensed brokers. B. Opportunities (1801—1914) 1. Establishment On 3 March, 1801, the first regulated institution of the London Stock Exchange was formed and the modern Stock Exchange was born. 2. First codified rule book In February 1812, the General Purpose Committee confirmed a set of recommendations, which later became the foundation of the first codified rule book for the Exchange. With its new governmental commandments and increasing trading volume in place, the Exchange was progressively becoming an accepted part of the financial life in the City. The government used the Exchange's organized market to raise the enormous amount of money in the wars against Napoleon. C. During the Wars (1914 —1945) 1. The...

Words: 4472 - Pages: 18

Stock Exchange

...History of Shanghai Stock Exchange China Securities history can be traced back to the late Ming and early Qing Dynasty, in some high-income high-risk business areas, the mode of "investment funds, joint ventures" was operated, and the contract signed between the participants, to become China's first stock prototype. Before the Opium War between Britain and China, west countries international traders not only brought the opium to China, but also brought the advanced finance model and knowledge to china. The first foreign security was issued by a foreign enterprise in 1840s. In 1872, the first Chinese stock was issued by China's first joint-stock companies and the Chinese people. Securities promote the development of securities transactions and capital market. The beginning the Securities and Exchange were only foreigners, and later the Chinese businessmen started to use the securities transactions. China's first stock trading securities companies was established in 1869. One of Shanghai stock company was established in September 1882 and developed the relevant articles of association, the Securities and Exchange haphazard development has become more standardized. In 1891, the Shanghai Share brokers Association was established, which was regarded as the primitive form of stock bourses in china. In 1920 the Shanghai Securities & Commodities Exchange was established, and a year later the Shanghai Chinese Merchant Exchange began. They were combined in 1929, and were then......

Words: 719 - Pages: 3

Largest Stock Exchange

...10 Largest Stock Exchanges from Asia, Europe, Africa and America: 1. Asia: i. Bombay Stock Exchange: The Bombay Stock Exchange is the oldest exchange in Asia. It traces its history to the 1850s, when four Gujarati and one Parsi stockbroker would gather under banyan trees in front of Mumbai's Town Hall. The location of these meetings changed many times, as the number of brokers constantly increased. The group eventually moved to Dalal Street in 1874 and in 1875 became an official organization known as 'The Native Share & Stock Brokers Association'. In 1956, the BSE became the first stock exchange to be recognized by the Indian Government under the Securities Contracts Regulation Act. The Bombay Stock Exchange developed the BSE SENSEX in 1986, giving the BSE a means to measure overall performance of the exchange. In 2000 the BSE used this index to open its derivatives market, trading SENSEX futures contracts. The development of SENSEX options along with equity derivatives followed in 2001 and 2002, expanding the BSE's trading platform. The equity market capitalization of the companies listed on the BSE was US$1 trillion as of December 2011, making it the 6th largest stock exchange in Asia and the 14th largest in the world.[1] The BSE has the largest number of listed companies in the world. As of December 2011, there are over 5,112 listed Indian companies and over 8,196 scrips on the stock exchange,[3] the Bombay Stock Exchange has a significant trading......

Words: 5456 - Pages: 22