All Theses, Dissertations, and Capstone Projects

Year of Award



Master of Business Administration (MBA)


College of Business & Professional Studies

Degree Program



Business Administration


Laos, Africa, exports, companies


The Nigerian Stock Exchange (NSE) has enjoyed an interesting first 29 years, during which* investors have had to take into account two civilian administrations, three military governments, a major civil war, a substantial economic boom, and now significant recession.

Despite it all, the exchange, which includes trading floors in Kaduna and Port Harcourt, has seen no major disasters. None of its 120 Listed Companies has gone bankrupt, and only one, a parastatal, had been suspended, to be allowed back after three years when it had put its house in order.

More and more companies find that they need new capital, but they cannot get it from the banks at the right price. With the present interest rate structure, people are thinking it better to come to the capital market.

Despite the depression, companies’ balance sheets are looking very good. Most companies are very buoyant and healthy. Construction has suffered. Their shares are being sold at a tremendous discount, most below par. The same has happened with the automotive companies which have not looked far enough ahead and diversified. But food, pharmaceuticals, chemical companies, detergents, and major breweries are booming.

The import-export companies have also suffered, but that business was done mainly by the.big conglomerates. What has happened with them is they have diversified away into manufacturing and they seem to be weathering the storm.

The Security and Exchange Commission (SEC) has a dominant say in the markets. Some brokers and bankers both agree they are too dominant, but the SEC officials argue however, that because the market itself was still relatively underdeveloped, it was important to have a strong regulatory control to protect investors and therefore, enhance their confidence in the market.

Not all pitfalls have seemed obvious. Insider trading, for instance, had not been considered a danger in Nigeria, but in the light of developments in other markets, some SEC officials have worked with a stock exchange committee to draw up proposals to guard against the practice.

Not all investors are well educated. Some of them certainly could not read a balance sheet, evaluate accounts or understand why a company was profitable or likely to head into difficulties. One man who bought a share was; so proud of it that he had it framed and put on his wall. He had no intention or idea of ever selling it.

Already in anticipation of significant external investment flows and in a move designed to internationalize the market, the Nigerian Stock Exchange has begun quoting its securities worldwide over the Reuters Monitor International Finance Services.

The SEC’s strong examining powers have been of particular benefit to the cash-strapped state governments which have begun to issue their own loans, stocks, or bonds. In 1987, three states, Bendel, Ogun, and Oyo had issued bonds and another three states, Anambra, Kano, and Imo had announced plans while was still getting a delayed issue under way Bendel was, in fact, the very first state government to issue a bond, when it saw a 67% take up for its =N=20 million stock. A large proportion of shares are closely held. Most of, the leading listed companies were originally promoted by foreign interests. These original promoters still hold about 20%-22% of the shares that are held by pension funds and other institutional investors.

The Nigerian Stock Exchange is still a young market, as such, it is still just scratching the surface of capital formation. Historically, capital formation has been done through the commercial banks.

Proceeds from the Nigerian Stock Exchange’s revenue goes toward the federal annual budget and thus maintains its iii role as the cornerstone in the nation’s capital formation and engine of production and development process in Nigeria.


Charts and photographs were black-and-white photocopies in the original and have been digitized at the highest possible resolution.

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Restricted Thesis

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