CAPITAL MARKET REFORM AND THE PERFORMANCE OF THE NIGERIAN STOCK EXCHANGE: AN IMPACT EVALUATION

CAPITAL MARKET REFORM AND THE PERFORMANCE OF THE NIGERIAN STOCK EXCHANGE: AN IMPACT EVALUATION

ABSTRACT

The stock market is a common feature of a modern market economy and it is reputed to perform necessary functions, which promote the growth and development of an economy. This study examined whether the capital market reforms so far carried out in Nigeria have impacted significantly on the performance of the Nigerian Capital Market. To achieve this objective, ordinary least square regression (OLS) was employed using the data of capital market activities from 1988 to 2007. The result indicated that there is a significant difference in the performance of the capital market before and after the reform. This was achieved using the performance indicators which included the market capitalization, volume of stocks traded, value of stocks and the share index. The result showed that the indicators used increased faster in the post reform period than the pre reform period. The result of the study which established positive impact suggest that; government and stakeholders should strengthen the regulation and transparency in all the deals in the market as this will boast and attract more private participation in the market with its overall growth of both the market and the economy. And also, the NSE should find means of cutting down cost of raising fund on the exchange so as to allow more companies the opportunity of accessing fund from the exchange.