The stock exchange is a specialized market place for buying and selling of securities. Securities means shares, stock, debentures and bonds, the stock exchange is an organized market where those intending to buy or sell stocks and shares meet to transact business. The stock exchange as a market is a place where business can raise capital to become bigger in terms of capital formation. It must however be noted that the stock exchange deals with the securities of existing establishment only.
The Nigeria stock exchange (NSE) was incorporated on September 15, 1960 as a company limited by guarantee and started operations in Lagos in 1961 as Lagos stock exchange later changed its to Nigeria stock exchange in December 1977 with a branch office in Kaduna and Part Harcourt in 1978 and 1980 respectively Nigerian stock exchange has operating branches in many centers in the federation. Branches opened in Nigeria are: Kano in 1980, Onitsha in February 1990, Ibadan in August 1990, Abuja in October 1990, Yola in April 2002, Benin in 2002, Uyo in 2002, Abeokuta was opened in November, 2008. Each branch has a trading floor where activities of buying and selling of securities are carried out. The Lagos branch remanded the headquarters. The government established Abuja stock exchange as independent stock exchange following the implementation of odife report on the Nigeria capital market. It was restructured to serve as a commodity exchange in its initial purpose to complete with Nigeria stock exchange.
The Nigeria stock exchange started operation with only a securities (93 equities and 6 government state) it has over 312 securities made up of government stocks, bonds, individual loan (debentures) preference stocks and equity ordinary shares or companies all with a total market capitalization of over N12.62 trillion before dropping to a little over N7 trillion following a prolonged market meltdown (Idowu, 2008). Market capitalization is the aggregate market prices of a company’s shares: it is the value of a firm as determined by the market price of its issues and outstanding common stocks. The Nigeria stock exchange provides the essential facilities for companies and government to raise money for business expansion and development project through investors who own shares in corporations for the ultimate benefit of the economy. The Nigeria stock exchange was also established to increase the role of capital in the economy, to bring currency in circulation in banking sectors and to enhance the effectiveness of the country’s monitory policy and to expand the market (NSE, 2006). The Nigeria stock exchange is governed by a team of shareholders elected at an annual general meeting. These shareholders constituted the governing council (Board) of the Nigeria stock exchange. The council is headed by a president (chairman) while the nation secretariat is lead by a director general (DG) (chief executive (Other) who is responsible for the day to-day administration of the exchange.
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