CHAPTER ONE: INTRODUCTION
1.1 Background to the Study
1.2 Statement of the Problem
1.3 Objectives of the Study
1.4 Research Questions
1.5 Research Hypotheses
1.6 Scope of the Study
1.7 Significance of the Study
1.8 Operational Definition of Terms
References
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction
2.2 History of the Nigerian Capital Market
2.3 Structure of the Nigerian Capital Market
2.4 Regulatory Environment of the Nigerian
Capital Market
2.5 Securities and Exchange Commission
2.6 Functions of the
Nigerian Capital Market
2.7 Listing on the Nigerian Stock Exchange
2.8 Benefits of Listing (Public Quotation) on
the Nigerian
Stock Exchange
2.9 Methods of Listing in the Nigerian Stock
Exchange
2.10 Organization and Operations
of the Nigerian Stock Exchange
2.11 Operations of the Nigerian Stock Exchange
2.12 Methods of Pricing
Securities in the Nigerian Stock Exchange.
2.13 Pricing Efficiency of the Nigerian Stock
Exchange
2.14 Consumer Behaviour
2.15 Summary
References
CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Introduction
3.1 Research Design
3.2 Re-Statement of Research Questions
3.3 Re-Statement of Research Hypotheses
3.4 Research Methods
3.5 The Study Population
3.6 The Sampling Design and Procedure
3.7 The Research Instrument
3.8 Validity of Questionnaire
3.9 Reliability of Instrument
3.10 Method of Data Analysis
References
CHAPTER FOUR: DATA ANALYSIS AND
PRESENTATION
4.1 Introduction
4.2 Analysis Based on Questionnaires
4.1 Questionnaire Breakdown
4.2 Analysis of Hypotheses
4.3 Summary
CHAPTER FIVE:
SUMMARY, CONCLUSION AND
RECOMMENDATIONS
5.1 Summary
Findings
5.2 Conclusion
5.3
Recommendations
Bibliography
Questionnaire
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
For any economy
to remain afloat in its bid for survival m today's globalization, deregulation
and liberalization of markets, it needs to have an efficient financial system
to direct the allocation of its resources capital markets and institutions, of
which the stock exchange is an integral part of and have become of, paramount
importance in a dynamic economy as Nigeria.
The capital
market is a sub-set of financial system that provides the accelerated growth of
the economy. This is done by efficiently channeling fund from investors into
productive sectors of the economy. It serves as an avenue for government and
companies to raise long-term funds to finance their activities (Nwankwo, 2000).
The capital
market consists of a network of institutions and individuals comprised of
regulators and operators who, together, facilitate the smooth operation of the
market. In other words, the capital market comprises providers of funds
(investors), users of funds (companies and governments), intermediaries (stock
brokers, issuing houses, registrars) and regulators (SEC, the Nigerian Stock
Exchange and Central Bank of Nigeria).
The Nigerian
Capital Market is made up of basically two components: the primary and
secondary market. The initial sale of securities from the issuing corporation
or government to the investor is done in the primary market (yisa, 2001). The
issuers uses the funds raised to expand production, build infrastructures and
the like very few investors can be persuaded to tie up their funds
indefinitely. Therefore, securities are usually negotiable, enabling the
initial buyers to re-offer the securities to any interested party at any prices
which is mutual satisfactory. It is, therefore, a function of securities
exchange to provide an arena where such mutually satisfactory prices may be
determined. It is in this regard that it becomes important to analyze the stock
pricing function of the Nigerian capital market, with reference to buyers'
behavior.
Osuagwu, (2006)
describes buyer behaviour as the behavior customer's or client's will display
in searching for, buying, using, evaluating and disposing-off products,
services and ideas which they expect will satisfy their needs and wants. This
makes buyer behavior a study of how individuals make decisions to spend their
resources on consumption - related items and their evaluation of such purchase
decisions. This study therefore appraises the impact of stock pricing on buyers
behaviour in the Nigerian capital market.
1.2 Statement of
the Problem
As a result of
both institutional and individual investors staking out their hard earned money
m order to earn a reasonable return on securities acquired in companies, it
would be necessary to know whether the shares and securities acquired in
companies quoted in the Nigerian Stock Exchange are properly priced. However,
there is great need to critically consider the following relevant problems as
regards the research topic:
a.
Lack of information from listed companies
b.
Lack of knowledge of the operations and functions of the
stock exchange.
c.
Difficulty in obtaining quotation in the stock exchange
d.
Lack of clear understanding of the pricing of shares and
securities in the Nigerian Stock Exchange
1.3 Objectives of
the Study
In the light of
the pervasive Ignorance shrouding the operations of pricing in the Nigerian
capital Market, this study is set to achieve the following specific objectives:
a.
To appraise securities pricing on buyer behavior in the
Nigerian Capital Market.
b.
To evaluate the various methods used m pnce determination
of shares and securities.
c.
To inquire into the efficiency of the market for
securities.
d.
To examine how public investors place reliance on prices
of securities in this market.
e.
To find solution to obstacles facing pricing of securities
on the Nigerian Stock Exchange.
1.4 Research Questions
This research
work will attempt to answer the following questions:
(i) How do you appraise securities pricing on
buyer behavior in the Nigerian Capital Market?
(ii) How relevant are the method of pricing
securities used in the Nigerian Capital market in relation to other methods
available?
(iii) What factor is most responsible
for efficiency of the market for securities?
(iv) To what extent do public
investors place reliance on prices of securities in this market?
(v) What
are the possible solutions to pricing of securities on the Nigerian Stock
Exchange?
1.5 Research Hypotheses
For the purpose
of this research work, it is desirable to test the hypothesis so as to make
valid conclusions to either accept or reject the assumptions on the following
basis.
Hypothesis
One
Ho: There is no relationship
between Securities pricing and buyer behavior.
Hi: There is a
relationship between Securities pricing and buyer behavior.
Hypothesis Two
Ho: There is no
relationship between method of pricing securities and Nigerian Capital Market.
Hi: There is a
relationship between method of pricing securities and Nigerian Capital Market.
Hypothesis Three
Ho: There is no
relationship between efficiency of the market for securities and buyer
behaviour.
Hi: There is a
relationship between efficiency of the market for securities and buyer
behaviour.
Hypothesis Four
Ho: There is no
relationship between public investors' reliance and prices of securities.
Hi: There is a
relationship between public investors' reliance and prices of securities.
1.6 Scope or the Study
As the topic
suggest, this study focuses on the pricing function of the Nigerian Capital
Market and its relative influence on buyer behaviour.
Therefore, the
study confines itself to history, operations and functions of the Nigerian
capital market in relation to stock pricing and buyer behaviour.
In so doing,
selected quoted companies will be used as units of analysis.
1.7 Significance of the Study
This study would
be of great benefit to market operators like the stockbrokers, issuing houses
and their likes, as it would bring out their short coming in the area of
pricing of securities. It would also be valuable to public investor as it would
enlighten them on stocks to invest in.
The study would
also be significant to students of finance, accounting, economics, marketing and
business administration, as it would educate them on the pricing function of
the Nigerian capital Market and . The study would also assist policy makers in
the Nigerian Capital market in developing strategies that would improve pricing
efficiency and thereby improving the general efficiency as a result.
1.8 Operational Definition of Terms
A number of
concepts that are very central to this study are defined in the following
paragraphs. The purpose of the definition is to facilitate an explanation of
these terms so that the reader can fully understand the context in which such
words have been used in the study:
Buyer Behaviour: This is the
anchor of successful marketing practice. It addresses major questions regarding
the behavior / action of buyer/consumer/client towards a product, service or
idea.
Capital Market: This is the
market for long term capital i.e long term financing assets. It is a market
where long term financing assets are traded including preference and common
stock debentures and bonds.
Stock Pricing: The price of
company stock is an indication of the performance of company where stock is
properly priced; investors can invest in the most profitable companies based on
the stock prices of the companies.
The Securities
Market: This refers to the market where, the purchase and sale of securities
takes place. It has three dimensions i.e. the capital market, money market, and
secondary market.
Primary Market: This refers to
the new issues market when a firm issues new security either bonds or common
stock, the securities are sold in primary market since they are new issues.
Once the securities have been sold, any future sales occur in the secondary
market. The primary market also exists in the money market.
Secondary Market:
This
1S the market which
exists as a result of future sale of securities which had initially been traded
upon in the primary market.
Right Issues: This is the raising of more funds by
quoted companies through special issues of shares to existing shareholders of
the issuing company. It is typified by the on-going privatization exercise.
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