The Nigeria Stock Exchange: An Overview
(Over 20 years investing experience in Nigeria’s financial markets)
The stock exchange is the centre of activities of the capital market. It is the market for the buying and selling of stocks, shares and securities. It is essentially a secondary market in that only existing securities, as opposed to new issues could be traded on. It however has very strong connection with the primary market in that it facilitates primary market activities.
The stock exchange was incorporated in 1960, but the act that established the Lagos Stock Exchange was signed into law in 1961. The act that established the stock exchange followed the recommendation of a special report. “Report of the committee appointed to advice on ways and means of fostering a share market in Nigeria” produced by a committee headed by Professor RH Barback of England.
The Lagos Stock Exchange metamorphosed into the present Nigeria Stock Exchange in 1977 as a result of the “Okigbo financial system review committee” and the recommendation of the Governor of the Central Bank of Nigeria.
The Objectives of the Nigeria Stock Exchange are as follows:
- The creation of appropriate machinery for capital formation and efficient allocation of savings among competing productive investment projects.
- Machinery for mobilising long term financial resources for industrial projects.
- Maintenance of discipline and confidence in the capital market.
- Broadening the share ownership of enterprises.
- Providing the necessary liquidity mechanism for investors through a formal market for debt and equity securities.
- Maintenance of fair and equitable prices for securities.
- Acting as leading indicator of economic activities in the aggregate economy.
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Did you know?
The following individuals and institutions signed the memorandum of association of Lagos Stock Exchange on 15th September 1960 upon its incorporation.
- Chief Theophilus Adebayo Doherty
- Sir Odumegwu Ojukwu
- Mr. Akintola Williams
- Alhaji Shehu Bakar
- John Holt (Nig) Limited
- The Investment Company of Nigeria Limited
- C.T. Bowring and Co Nigeria Limited.
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References
- Money, Banking and Economy in Nigeria by Patrick Osiegbu
- Monetary Economics by Layi Afolabi
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Memorable investment quote
I am a better investor because I am a businessman, and a better businessman because I am an investor. – Warren Buffet.
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Next week we shall discuss the functions of the Nigerian Stock Exchange
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To God be the glory, the Lord increased the size of my family through the addition of a baby boy on Saturday 21st September 2013.
May the child grow in the knowledge and fear of God, may he be greater than me, and may the resources which we shall use in providing for our children never cease to flow.
May God grant to us all more than our heart desires. AMEN
