Role Of Stock Exchange In Industrial Development

INTRODUCTION
1.1 BACKGROUND 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.
Therefore a reliable rate which results from investment in new factories, machinery, equipment and material to increase the physical capital stock of the nation. The stock exchange market plays an important role in propping up financial capital and provision of market for quoted stock so as to chance the fulfillment of these economic growth parameters. This investing so as to actualize the economic growth.

1.2 STATEMENT OF PROBLEM
The ignorance of the stock exchange has brought about how participation of firm and individual engaging in the stock exchange and this has also limited the availability of stocks and shares that could be traded on the stock market. The stock market is faced with the problem of valley in delivering and settlement of stock transaction.
For the fact that the number of quoted security is small and the total capitalization is about 335 billion which is nothing when compared with some companies abroad that have more than that amount of money as its capital is not encouraging. And for the fact that the government is get to privatize most of the companies in making the stock market not to have financial strength.
Also affecting the market is the fact that most of the operators ie the issuing, the stock brokers auditors etc. are not connected on line and as a result of this information does not come handy. The worst of it all is the political climate, which will not allow foreigners to invest in our securities because of unforeseen circumstances.

1.3 OBJECTIVE OF THE STUDY
1. One of the objectives is to examine the extent to which the Nigerian stock exchange has helped in the growth and development of the industrial sector.
2. The stock exchange has contributed positively to the industrial development of the economy in providing market for quoted securities.
3. The role of stock exchange to industrial development encourage firms and individuals to invest in the stock exchange venture, the recommendations from this write up can also help to as large extent to improve stock exchange and it show the important of the stock market.
4. This research work could also be guide to subsequent research work similar to this.

1.4 RESEARCH QUESTION
1. Why are stock market facing the problem of delay in delivering and settlement of stock transaction?
2. What cause low participation in firm and individual engaging in the stock exchange?
3. How can our political climate not allow foreigners to invest in our country?
4. Why do government delay to privatize most of the companies in order to have financial strength in the stock market?

1.5 HYPOTHESIS FORMULATION
To facilitate the expansion of the claims on the stock exchange role in industrial development these hypothesis have been formulated to know if the Nigeria stock exchange has made positive contribution to the industrial growth and development in Nigeria.
1. H0: Quoted firm do not perform significantly better then they did prior to such quotation
H0: Quoted firm do not perform significantly better then they did prior to such quotation
2. H0: There is no positive relationship between operational efficiency and pricing of securities.
H0: There is no positive relationship between operational efficiency and pricing of securities.
3. H0: Increase in quotation does not lead to increase in the investible fund.
H0: Increase in quotation does not lead to increase in the investible fund.

1.6 SIGNIFICANCE OF THE STUDY
The role of stock exchange and a catalyst in the development of the economy has not been a question of debtor. The stock exchange exist as a sources of fund to the industrial development and also for the channeling of personal savings stock into industrial place for trading company’s stock. It also creates room for capital widening stock rather than deeping it. The benefit of stock exchange quotation is the result of lower cost of capital when raising fund through the market as stock exchange helps to allocate funds between industries and also makes funds available to the most productive industries which hence develop the nation.

1.7 SCOPE OF THE STUDY
The scope of this study covers only the role the stock exchange as a marketing floor for quoted share and stock thereby providing liquidity for the shares and stock helps in the moping of units of inevitable funds which on the aggregate dorm large enough capital.

1.8 LIMITATION
These proposition are not easily established with out some constraints here and there. Some of the problems associated with the study is the lack of data and stick confidence exclusive to the market. Problem into salient areas were not allowed rather an exclusive reservation of the market and all information relating to such area were preserved for the market use only.
Although some members of the exchange assisted with some data information and oral explanation but not without restriction and limitations.
Another problem is the time allocation in this research work which is not enough to make a thorough investigation which the topic deservers. The financial restrictions cannot be left out which also made it impossible to visit the exchange regularly.
1.9 DEFINITION OF TERM
INDUSTRIAL DEVELOPMENT: The increase of industrial expansion of quantity and quality of output in industrial growth process.
STOCK: The ability to mop-up financial capital for investment purpose.