CAPITAL MARKET OPERATIONS
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Dr. Richard Mayungbe
Toll Free: +16462028832
CONTENTS
Ø Market background - Capital Market inter-relationships
Ø The Stock Exchange
Ø The Participants- Securities and Exchange Commission, the Stock Exchange, stock brokers, issuing houses, Registrars, Underwriters, Jobbers etc
Ø Accessing the Capital Market for Equities Issuing - The Primary Market
Ø Trading - The Secondary Market
Ø Equity Valuation
Ø International Equity Markets
Ø Equity Risk Management Portfolio Management and the importance of “beta” Equity Risk Management Tools:
Ø Background and development of the Bond Markets Primary vs. Secondary Market
Ø Instrument Characteristics
Ø Introduction to the Yield Curve
Ø Market background - Capital Market inter-relationships
The Capital Market is a sub-set of the financial system that serves as the engine of growth in modern economies. It is that part of the financial system that is involved in providing long term funds for productive use. It can be defined as the section of the financial system that is responsible for efficiently channeling funds from the surplus to deficit economic units on a long term basis. The capital market provides another option for governments and companies to raise long term funds for the construction of bridges, schools, factories and purchase of vehicles, facilities and equipments.
Ø The Nigerian Stock Exchange
Before 1961, almost all formal savings and deposits went through the banking system while the then colonial masters invested major capital balances for the country on the London Stock Exchange.
However, following the establishment of Central Bank of Nigeria in 1959, it was logical to have a stock exchange, hence the incorporation of the then Lagos Stock Exchange in 1960. Trading commenced in 1961 after the enactment of the Lagos Stock Exchange Act of 1961. The self-regulatory organization was subsequently reorganized and renamed the Nigerian Stock Exchange in 1977. The Exchange now has 13 branches. (appendix1) All the branches function principally as trading floors.
There are some misconceptions on the stock exchange. For example, several people believe that the Stock Exchange is government-owned. Factually, it is not a government institution. It is a non-profit making organization, limited by guarantee, incorporated via the inspiration and support of businessmen and the federal government, but owned by about 300 members. The membership includes financial institutions, stock brokers and individual Nigerians of high integrity who have contributed to the development of the stock market and the Nigerian economy.
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