Effect of Financial Meltdown on the Performance of the Nigerian Capital Market

Effect of Financial Meltdown on the Performance of the Nigerian Capital Market

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Reference ID: PS-7891-TM

DEDICATION

This research material titled “Effect of Financial Meltdown on the Performance of the Nigerian Capital Market” is dedicated to God for his enabling grace, and to all computer enthusiasts who contributed to make life a pleasant experience during my research documentation.

ACKNOWLEDGEMENT

I extend my sincere gratitude to all those who contributed to the completion of this project. Special thanks to my Supervisor (Name of your Supervisor), the Head of Department (Name of your HOD), the Lecturers in the department of Economics, Book Authors and Profound Scholars of existing or related project material on “Effect of Financial Meltdown on the Performance of the Nigerian Capital Market” for their invaluable guidance, support, and expertise throughout the journey.

I am also grateful to your study area (mention any funding organizations, if applicable) for their financial assistance. This research would not have been possible without the encouragement and assistance of some stakeholders (mention any mentors, teachers, or colleagues). Additionally, I would like to acknowledge the understanding and patience of my family and friends during this endeavor. Your unwavering support has been a constant source of motivation. Thank you all for being part of this meaningful endeavor.

ABSTRACT

A major engine of economic growth and development of any nation is its capital market. Until quite recently, the Nigerian capital market was the toast of many enlightened Nigerians both home and abroad. This research study investigated the impact of financial meltdown on the capital market with particular reference to the Nigerian stock exchange (NSE). In carrying out the study, survey research design was adopted and observations were drawn each from the periods before the crash and after the menace. Using F- test statistical analysis, three hypotheses were tested with respect to NSE ALL Share Index (ASI), Market Capitalizations and Market Turnover were rejected implying that the tests were statistically significant.

Similarly, using market model, it was discovered that there were significant changes in individual quoted securities and expected returns in the period under consideration. Above all, the findings of the study revealed that the financial meltdown impacted negatively on the operational performance and efficiency of the Nigerian stock market. It was recommended that the Nigeria government should inject physical cash into the stock market as a way of bail out in order to restore the lost confidence in the market and also the investors and stock market operators should play the games according to the rule.

Effect of Financial Meltdown on the Performance of the Nigerian Capital Market

CHAPTER ONE

1.1 Background Of Study

This part of this research material is available in the paid version

1.2 Statement Of The Problem

  1. The significant difference in stock index between the bubble period and crash period.
  2. The statistical significant relationship between market capitalization of the Nigerian exchange in the pre and post economic meltdown.
  3. The fundamental change in the total market turnover in the NSE between the bubble period and crash period.

1.3 Objectives Of Study

Financial meltdown refers to event like steep 4ii in stock market, decline in asset values and corporate losses that hurt the economy and investors. The main objective of this study is to provide a scientific investigating into the impact of financial meltdown on the Nigerian capital market. From the main objective we then have sub- objectives of the study this includes:

  1. To identify the significant difference in stock index between the bubble period and crash period.
  2. To identify the statistical relationship between total markets capitalization of the Nigerian stock Exchange in the pre and post economic meltdown.
  3. To identify the fundamental change in the total market turnover in the NSE between the bubble period and crash period.

1.4 Research Question

The Nigerian capital market as a segment of the financial system has evolved with the growth of the Nigerian economy. The market has been predominantly equities driven with the banking sector making up an important proportion of total market capitalization.

This research shall be guided by the following research questions;

  1. Is there any significant difference in stock index between the bubble period and crash period?
  2. What is the statistical significant relationship between total market capitalization of the Nigerian stock Exchange in the pre and post economic meltdown.
  3. Is there any fundamental change in the total market turnover in the NSE between the bubble period and crash period?

1.5 Research Hypothesis

The research hypothesis that would be tested in the course of this research is stated below as:

  1. Ho: There is no significant difference in stock index between the bubble period and crash period.
  2. Ho: There is no statistical significant relationship between total market capitalizations of the Nigerian Stock Exchange in the pre and post economic meltdown.
  3. Ho: There is no fundamental market change in the total market turnover in the NSE between the bubble period and crash period.
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CHAPTER TWO

2.0 Literature Review

2.1 Introduction

This chapter focuses on the review of related literature. A literature review includes the current knowledge as well as theoretical and methodological contributions to a particular topic. It documents the state of the art with respect to the topic you are writing. It surveys the literature in the topic selected. In this research work the literature review includes the …

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