Having capital is paramount but finding a secure and safe system for easy transactions and business systems is another thing. In this article, we will be talking about the duties and functions of the Nigerian Stock Exchange (NSE). How effective, secure, and its basic provisions
Firstly what is Nigerian Stock Exchange?
The Nigerian stock exchange is a marketplace where people buy or sell shares, stocks, and government
bonds, debentures and other approved securities.
The Nigerian Stock Exchange is one of the oldest exchange markets in west Africa that helps investors have access to reliable capital, provides a safe and secure saving method, and a favorable environment for business operations. it can be called a marketplace.
Here, stocks are bought at low prices and then sold when the prices and demands are high. It’s a liquidation process
The Nigerian Stock Exchange is one of the major and oldest stock exchanges in West Africa. It handles the buying and selling of stock and securities. This stock exchange market was founded in Lagos State. Dated back to 1960 and now has branches all over the country. The Nigerian stock exchange was denoted as (NSE)
It is currently known as the Nigerian Exchange Group and is now denoted by NEG. For registration, you can log in to https://ngxgroup.com//
Further More, we will be looking at the major duties or functions of the Nigerian Exchange Group Limited.
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Functions of the Nigerian Stock Exchange
The duties of the Nigerian Exchange group include;
- creation of a marketplace for buying and selling securities.
- It stimulates economic growth through capitalizing companies in the stock market that are rapidly increasing.
- Stabilization of the Nigerian economy.
- creation of platforms for businesses to raise funds from the public.
- It encourages both the investors and the buyers to save.
- Promotion of investors’ and issuers’ confidence.
- Encourages Foreign Investment
- Control of the inflow and outflow of funds in the system through the process of investment.
- Setting rules and regulations to safeguard the public from fraud and other illegal activities.
- It disseminates information to investors and industrialists during and after the market period.
- Serves as a medium to create, build wealth, and also be part of economic development.the
Creation of a marketplace for buying and selling securities.
Securities are instruments or tradable financial assets with value. They include Bonds, mutual funds, and ETFs (Exchange Traded Funds). Securities are divided into three which are Equity, Debt, and Hybrid.
The stock exchange market creates market place by permitting different companies to sell their shares through the process of IPO (initial public offering). The IPO is defined as a system or process of selling the shares of a private organization to the public in a new stock issuance as the first of its kind. This process promotes equity capital.
The platform where different companies come together to sell and buy their securities is what we call the Stock Exchange Market.
It stimulates economic growth through capitalizing companies in the stock market that are rapidly increasing.
The Nigerian stock exchange market provides this feature in many ways;
- It offers means for capital derivation for small and medium businesses or companies.
- It impacts the GDP ( Gross Domestic Product) positively and negatively.
- It helps in the conversion of investment to cash through liquidity, etc.
Stabilization of the Nigerian economy.
The Nigerian exchange group stabilizes the economy in ways such as :
- Providing a market floor for the sales of securities, bonds, and debentures.
- Provides corporate governance.
- It also enables the distribution of wealth.
- It mobilizes savings for investment.
creation of platforms for businesses to raise funds from the public.
After going through the application process as outlined in the stock exchange guideline. The company or business offers a minimal portion of the company’s shares to public investors. This adds up to the company’s capital.
It encourages both the investors and the buyers to save.
Using an automated trading system in the stock market, it’s done through the FGN Saving Bond.
Promotion of investors’ and issuers’ confidence.
- Regulated by the Nigerian securities and exchange commission
- It also provides guidelines to control the market against illegal transactions
- Reconstitution of the investor’s protection fund as at 2012
Encourages Foreign Investment
- Through multiple and cross-border enlisting in the stock market.
- Allowing foreign brokers to enlist as dealers in the Nigerian stock market.
- Permitting investors from different countries to invest freely.
Control of the inflow and outflow of funds in the system through the process of investment.
It automates the saving strategy, which builds up the capital for reinvestment and reviews your inflow and outflow of cash.
Setting rules and regulations to safeguard the public from fraud and other illegal activities.
- The general rules
- The operation and management of member organizations
- Trading and exchange operation
- Adjudicatory process
- Representative offices
- Sponsored Acess Rules
- Market making
- Securities and lending guideline
- The investor’s protection fund rules
- issuers Rules and listings, etc
It disseminates information to investors and industrialists during and after the market period.
Predicting to an extent the possible outcomes of the country’s economy
Serves as a medium to create, build wealth, and also be part of economic development.
- By selling shares of stock
- Investing wisely
- Efficient allocation of capital
- Building productive firms
- Foreign investments
Generally, the duties of the Nigerian exchange group as listed above varies. It helps to promote and maintain the country’s economy. Its different functions serve different purposes and help carry not just the large scale businesses but the small scale business too. it doesn’t discriminate against nationality or race.
It is an avenue to build wealth. the system of raising capital is of immense benefit it investors with little or no capital.
depending on how you operate it enriches companies while some other companies or investors lose their shares or stocks.
Frequently Asked Questions
When did the Nigerian Stock Market change to The Nigerian exchange group?
ANS: In 2012
How many years has the Nigerian stock market been in existence?
ANS: Founded on September 1960. It’s 63 years now
Can the stock market be affected?
ANS: Yes, the stock market gets affected at times.
What affects the stock market?
ANS: We have the political factors, inflation, natural calamities, etc
Is the Nigerian exchange group the oldest stock market?
ANS: No, it is not
Which is the oldest stock Market?
ANS: Amsterdam stock Exchange birth in 1957