TABLE OF CONTENTS
CHAPTER ONE
INTRODUCTION
1.1 Background
to the Study
1.2 Significance
of the Study
1.3 Statement
of the Problems
1.4 Objectives
of the Study
1.5 Research
Hypotheses
1.6 Research
Questions
1.7 Method
of Data Collections
1.8 Method
of Data Analysis
1.9 Scope
and Limitation of the Study
1.10
Definition
of Terms
1.11
Brief
History Of Cadbury Nigeria Plc (Case Study)
CHAPTER TWO
LITERATURE REVIEW
2.1
Introduction
2.2
History of the Nigerian Capital Market
2.3 Structure of the Nigeria Capital
Market
2.4 Meaning of Capital Market:
2.5 Importance
and Functions of Capital Market
2.6 Classification
of Capital Market
2.7
Securities
and Exchange Commission
2.8 The Control over the Nigeria Stock Exchange
by the Commission
2.9 Functions
of the Nigeria Securities and Exchange Commission
2.10 The Nigerian Stock Exchange (Nse)
2.10.1Clearing, Delivering and Settlement:
2.11 Function
of the Nigerian Stock Exchange
2.11.1Membership of Nigerian Stock Exchange
2.11.2The Market Levels of Nigeria Stock Exchange
2.11.3Techniques of Going Public or Bringing
Securities to the Stock Exchange (SSM)
2.11.4Benefits of Public Quotation
2.12 Definitions
of Small Scale Businesses
2.13 Small
Scale Businesses in Nigeria
2.14 Operational
Definition of Small Scale Businesses
2.15 Social
Desirable Effects of Small Scale Businesses
2.15.1 Socio – Economic Contribution of Small
Business Firms to Development Process
2.16 Problems
of Small Scale Business
2.17 Involvement
of Small Scale Business In Nigerian Stock Exchange (NSE)
2.18 Relevance
of Nigerian Stock Exchange to Small Scale Businesses
CHAPTER THREE
RESEARCH METHODOLOGY
3.1
Introduction
3.2
Research
Design
3.3
Population of the Study
3.4
Sample
and Sampling Techniques
3.5
Method of Data Collection
3.6
Method of Data Analysis
3.7 Scope and Limitation to the Study
3.8
Validity
and Reliability of Data Collection Instruments.
CHAPTER FOUR
DATA ANALYSIS AND INTERPRETATION
4.1
Introduction
4.2 Bio –
Statistical Data of Cadbury Nigeria Plc
4.3 Test of Hypotheses
4.4
Summary
CHAPTER FIVE
SUMMARY,
CONCLUSIONS AND RECOMMENDATIONS
5.1
Summary of Findings
5.2
Conclusion
5.3
Recommendations
5.4
Suggestion for Further Studies
Bibliography
Appendix: Questionnaire
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
For any
economy to remain afloat in its bid for survival in today’s globalization,
deregulation and liberalization of markets, it needs to have an efficient
business financial to direct the allocation of its resources, capital markets
and institutions, of which the development is an integral part of paramount
importance in a dynamic economy as Nigeria.
Capital market is a market for
securities (Equity or debt), where business enterprises and government can
raise long-term funds. It is also defined as a market in which money is
provided for period of longer than a year, as the raising of short term funds
take place on market e.g. Money market. The capital market includes stock
market (equity securities and bond market, debt). Securities and Exchange
Commission (SEC) oversees the capital market in their designated jurisdiction
to ensure the investors are protected against fraud among other duties.
Nigeria is still grapping with the
problems of low earnings with its attendant balance of payment problems, weak
technological industries base resulting in massive importation of machinery and
raw material, high rate of unemployment.
Actually, the economic turn down
which started in 1978 is very much with us. The decline in Gross Domestic
Product (GDP) from N26.9 billion in
1984 to N3.6 billion in 1985 marked the
beginning of importation of the world’s cast away goods into our country making
Nigeria a dumping ground.
Small scale business is the only
way to boost export and redress the gloomy of balance of payment deficit.
Nigeria government recognized this
fact in 1971; small scale industries credited scheme was introduced and
followed up with the establishment of Nigeria Bank for commerce and industry in
1978. The Central Bank of Nigeria also introduced its small scale business.
Despite all these measure, it is
still obvious that small scale business problem is funding. And the actual
fact, the growth of the small scale business still centre on proper funding
which is missing today.
Capital market is seems as an
alternative way of raising funds. The enhancement of an advance and vibrant
capital market can lead to utilization of financial resources. The developed capital market also provides
access to the foreign capital for domestic industry. In this way, capital
market plays a constructive role in the over-all development of an economy
generally.
1.2 SIGNIFICANCE
OF THE STUDY
Capital market has a great interest
to the researcher which will help in increasing g my knowledge and skills.
Also, this sector of the economy is one of the important factors and also plays
a significant role in the natural economy.
A developed, dynamic and vibrant
capital market can immensely contribute for speedy and economic growth and
development.
1.3 STATEMENT
OF THE PROBLEMS
The Nigeria small scale business is
faced with the problems of inadequate and low working capital. This aspect of
small has really slowly down their growth and development of small scale
business to be at a small-pace consequently.
Mostly they depend mainly on self
finance (saving and borrowing from
friends and family) and loan from willing providers (bank) who are always
reluctant of providing loans for them due to weak financial background or
history. Small scale businesses in Nigeria also face the challenges of
concentrating risk in the hand of the owner. Thus, such risk can be spread by
bringing their business to the stock exchange.
The capital market is also having a
fair share of the problems because of the in adequate supply of securities and
fall in stock exchange market. Most companies especially the indigenous ones
are still reluctant in raising funds through the capital market.
1.4 OBJECTIVES
OF THE STUDY
a.
To inquire
the development of the Nigeria Capital Market in the small scale businesses
b.
To determine
the trend/development of Capital Market
c.
To inquire
the factors that solely determines the Capital Market.
d.
To make
appropriate recommendation on the development of the Nigerian Capital Market.
1.5 RESEARCH
HYPOTHESES
The
following will be formulated and tested for the study.
Ho: Small Scale businesses methods
are not used in the Nigerian Capital Market for the development of the firm
Hi: Small Scale businesses methods
are used in the Nigerian Capital Market for the development of the firm?
Ho: Shareholders do not place reliance on small scale business in
the Capital Market
Hi: Shareholders do place reliance on small scale business in the
Capital Market
Note: H0 = NULL HYPOTHESIS
Hi = ALTERNATIVE HYPOTHESIS
1.6 RESEARCH
QUESTIONS
This
research work will attempt to answer the following questions:
1.
How does the development
of small scale business related to Capital Market?
2.
How relevant
are the method of small scale business used in the Nigeria Capital Market?
3.
To what
extent do shareholders place reliance on small scale business in the Capital Market?
4.
To what level the role of the capital
market motivate the growth and development of the small scale business has been
met?
1.7 METHOD OF
DATA COLLECTIONS
Both primary and
secondary source of data collection will be applicable for this study.
PRIMARY
DATA
This data will be
obtained through interview investigation and questionnaires and face to face
discussion
SECONDARY
DATA
This data will be
obtained mainly from the literature review or the ready made materials like
written down documents which includes textbooks, bulletins and write-up by
experts in this field and also from the internet.
1.8 METHOD OF
DATA ANALYSIS
This chapter aim at
breaking down fully how the data collection are used in the research work
gathered, the data gathered is not an
end itself rather it stands to be analyzed into meaningful and use information.
The purpose of this chapter is to analyze an evaluation.
The
statistical tool to be used is the chi square (x2) technique. This
will enable the following to be formed and its validity verified by
presentation of findings to test the two hypotheses, stated above will be
explained better in chapter four.
1.9 SCOPE AND
LIMITATION OF THE STUDY
The scope of the study will be
limited the role of capital market in the development of small scale business
in Nigeria on the capital market and how the efficient utilization of available
domestic capital resources could evolve positive changes in their performance.
As the
topic suggest, this study focuses on capital market in the
development of small scale business in Nigeria.
1.10
DEFINITION OF
TERMS
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.
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 is
the market which exists as a result of future sale of securities which had
initially been traded upon in the primary market.
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.
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.
Allotment
Is a part of stock issued,
appointed or assigned by an in vestment company to purchase or subscriber of
its shares, stock or securities.
Dividend:
A portion of the net profit that
has been officially declared by the board of directors of a company for
distribution to the ordinary shareholders of the company and approved by them
at the company’s general meeting.
Equity:
This is used to describe the
ordinary share capital of a company.
Stock
Broker:
Is a regulated professional broker
who buys and sells share and other securities through market sells shares and
other securities through market make or agency only firms on behalf of investors.
Listing:
This is a stock or bond’s admission
to trading right on the stock exchange based on its size, profitability and
number of shareholders.
Quotation:
The highest bid to buy and the
lowest offer to sell a security in a given market and at a particular time.
Issuing
House:
Is a financial institution such as
a merchant bank which provides its services to launch the shares of new
companies on a stock exchange? It also ensures that the listing of such issues
complies with exchange regulation.
Shares:
A
unit of equity ownership in a company.
Share
Price:
Is the price of a single share of a
number of a saleable stock of a company.
Shareholder:
Is a person who buys share/shares
of any company and by acquiring share or shares in the company becomes one of
the owners of the company.
Ordinary
Share
Representing part of the capital
issued by a company and entitling their
holders to a dividend that varies according to the prosperity of the company to
vote at all meeting of members and to a claim on the assets of the company after
the holders to preference shares.
Share Certificate
Is a written document signed on
behalf of a company and serves as a legal proof of ownership of the number of
shares indicated.
1.11 BRIEF HISTORY OF CADBURY NIGERIA
PLC (CASE STUDY)
Cadbury Nigeria commenced operations in the 1950’s
as an enterprise established to source cocoa beans whilst simultaneously
prospecting for opportunities to serve local consumer markets with their famous
Cadbury products. An initial packing operation established in the early 1960’s
grew rapidly into a full-fledged manufacturing operation. The Company was
incorporated as a limited liability company in January 1965, when the Company’s
current 42-hectare factory was also opened. Its shares were listed on The
Exchange on 26 November 1976.
The core business of the Company is in two
categories, namely confectionery and food drinks, which are manufactured in a
dedicated facility within the factory site in Lagos.
The Company has grown to become one of the leaders
in the confectionery and food drinks markets within Nigeria, with a portfolio
of branded offers that are targeted to meet real needs of consumers. The
Company’s quality brands are enjoyed throughout Nigeria as well as in the
Company’s export markets in West Africa. This rich heritage has been carefully
nurtured over the years.
The Company’s lead brand in the food drinks business
is BOURNVITA, which holds a strong market share in the Nigerian market. In
addition, the brand offers nutritional benefits that help to supplement the
dietary intake of consumers. The main brands in the Company’s confectionery
business include TOM TOM and BUTTERMINT, for sale in Nigeria, and HACKS and
AHOMKA GINGER, which are exported to neighbouring countries. Each brand has
grown to become a household name and each holds a strong market share in their
respective segments.
Cadbury Nigeria has a 93% shareholding in SCPCL, a
company located in Ondo State which processes cocoa beans into cocoa butter and
liquor aimed at international markets, as well as cocoa powder for domestic
consumption. The Company’s entire cocoa powder requirement is sourced from
SCPCL.
Following a major strategic review in 2008, the
Company has commenced an extensive restructuring exercise to restore its path
to profitable growth. The Company has also identified significant growth
potentials from its core brands, BOURNVITA and TOMTOM, as they appeal to a very
wide spectrum of Nigerian consumers having been available in the market place
for almost years. A review of the
Company’s route to market commenced in 2008, with a thorough re-appraisal of
its existing distributor partnerships and operational procedures. This has
resulted in a strong and rejuvenated distribution channel with additional
partners, a new key account structure and a growing retail sales team building
distribution and display.
Research on Nigerian consumers consistently endorses
the popularity of the Company’s famous brands. In this regard, the Company is
committed to a programme of continuous improvement and modernisation that has already
seen a number of popular innovations over the last year. This commitment to
innovation and renovation will also be maintained in the future.
The strategy review also focused on opportunities to
improve efficiency and quality of products through a disciplined approach to
international benchmarking and investing in infrastructure projects. This
approach is expected to yield both productivity benefits as well as provide
opportunities to streamline production processes and align the factory for
future growth.
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