Thesis Abstract

Abstract
Capital markets play a critical role in the economy by facilitating the flow of funds from investors to businesses and governments. This research aims to explore the nature and significance of capital markets in the financial system. Capital markets are where long-term securities such as stocks, bonds, and other financial instruments are bought and sold. They provide a platform for investors seeking to invest their savings for long-term returns and for businesses and governments looking to raise capital for various projects and operations. The nature of capital markets is characterized by their ability to allocate capital efficiently by matching the supply of funds from investors with the demand for funds from businesses and governments. This allocation process is based on market forces of supply and demand, as well as factors such as risk, return expectations, and liquidity preferences. Capital markets are also known for their depth and liquidity, allowing for easy buying and selling of securities, which helps in determining fair prices and ensures market stability. The significance of capital markets lies in their role in promoting economic growth and development. By providing a channel for businesses and governments to raise long-term capital, capital markets support investment in productive activities, which in turn stimulates economic growth. Additionally, capital markets contribute to the efficient allocation of resources by directing funds to projects and companies with the highest potential for returns, thus enhancing overall economic efficiency. Moreover, capital markets play a crucial role in fostering innovation and entrepreneurship by providing funding opportunities for start-ups and small businesses. This access to capital enables innovative ideas to be transformed into viable businesses, driving technological advancements and creating job opportunities. Furthermore, capital markets enhance financial inclusion by enabling a wide range of investors, including institutional investors, retail investors, and foreign investors, to participate in the market, thus democratizing access to investment opportunities. In conclusion, capital markets are a vital component of the financial system that serves as a bridge between investors and businesses/governments seeking capital. Their nature is characterized by efficiency, liquidity, and market forces, while their significance lies in promoting economic growth, resource allocation, innovation, and financial inclusion. Understanding the nature and significance of capital markets is essential for policymakers, investors, and market participants to make informed decisions and contribute to sustainable economic development.

Thesis Overview

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

A capital market is a complex institution comprising of regulators, facilitators, issuers and investors. It is the mechanism through which long term funds for households, firms and government are polled and made available to various sectors of the economy, including transfer of instrument already outstanding. The capital market on the other hand, deals with long term financial claims and obligations. It provides the necessary facilities for users and supplier of capital (Longterm) funds to interact for their mutual benefit. Hence most financial activities which are necessary in the investment process are consummated in that market. Capital market instruments have long-term maturity. Some like equity stock have indefinite maturity dates. In general, all financial transactions which involve maturity periods of over three years could be presumed to belong to the capital market it also has no confined place for its operation however, parts of the market are concentrated in certain well-known centers. Participants in the market are businessmen, government at all levels, financial intermediaries and private investors. In this market buyers are more specific about their requirements.

1.2  STATEMENT OF PROBLEM

Capital market is a market that deals with long term funds and procedure for financing long-term investments. it is also a market where by small business cannot benefit because of its high interest rate.

I want to investigate on some of the problems that hinders the promotion of capital market in Nigeria, also the corrective measure which could be used in solving these problems.

Some of the problems the researcher intends to research are:

a.  Dearth in securities

b.  Lack of adequate publicity

c.  Retention attitude

d.  Low savings

e.  Lack of interest in securities

Some of the corrective measures that could be adapted to resolve the problem are:

a.  Education on the important of buying

b.  Government helping to increase the standard of living in Nigeria.

c.  High interest rate should be implemented

d. Establishment of more quoted companies that will participate is selling of securities

1.3  OBJECTIVES OF THE STUDY

The main aim of the study is to find out how capital market institutions can detect and control some of these problems in issuing of securities to the public for the improvement of capital market in Nigeria.

Some objective of this study are:

1. To draw a clear picture of the nature capital market, its significance to economic growth and development of the economics.

2. To know the causes of these problems facing them.

3. To identify the implication of these problems in our economic.

4. To profer the possible solution to the problem.

1.4   SIGNIFICANCE OF THE STUDY

The study will be immensely beneficiary to the institution under study. The findings of the research work together with its conclusion and recommendation will be of importance in the regard to future researchers. It is also hoped that it will serve as a basis for further academic adventures.

The relief of these problems should improve capital market in our country.

These will also increase move surplus funds in economic development.

These will attract foreign capital inflows in Nigeria.