AN ANALYSIS OF THE IMPACT OF NIGERIAN CAPITAL MARKET (STOCK MARKET) ON NIGERIAN ECONOMIC GROWTH FROM 1961-2014.

BACKGROUND OF STUDY.
The Nigerian Capital Market of Nigerian Stock Exchange is a major player in the market for long-term funds. The in¬struments or securities traded in the capital market are known as capital market instru¬ments. However, the capital market has both securities based segment (i.e. the stock ex¬change) and non-Securities based segment (market for long term loans). Capital market instruments can be categorized into 3 major groups of securities: preference shares, or¬dinary shares and debt instruments. Some of the other principal and active market op¬erators in the Nigerian Stock Market include Stockbrokers, Investment Advisers, Issuing houses, Registrars, Fund Managers, Financial Advisers et cetera.
The Nigerian Stock exchange is the cen¬ter point of the Nigerian Capital Market. It provides a mechanism to mobilize private and public savings as well as making such funds available for productive purposes. The Nigerian Stock Exchange also assists in the allocation of the nation’s capital resources amongst numerous competitive alternatives. The stock exchange can also be a mechanism, which can measure and detect the symptoms of an impending economic boom or decline long before the predicted prosperity or de¬cline actually occurs provided the market is either in the semi-strong or strong form of efficiency level. It is good to distinguish the capital market from the Stock Exchange in the sense that the capital market is much wider and bigger than the Stock Exchange. The Stock Exchange is just a participating in¬stitution in the capital market albeit it is the most active of all the participants. The activ¬ity of the Stock Exchange in the capital mar¬ket is reflected by the Stock Exchange, which measures the activities on the capital market.

The main objectives of the Nigerian Stock Exchange as enunciated in the Memorandum of Association of the company is to create an appropriate mechanism for capital formation and provide efficient allocation of resources among competing alternatives. It is also ex¬pected to provide special financing strategies for projects with long term gestation periods. In addition, it helps to maintain discipline in the capital market as far as the participants and the investors are concerned and as such, assists to broaden the share ownership in the market by providing the enabling envi¬ronment and to provide and maintain fair prices for securities. The overriding objec¬tive of any financial system is the provision of a conducive atmosphere for the transfer of funds from the surplus sector of the econo¬my to the deficit sector. The Capital Market, in the process of carrying out its function is faced with many challenges such as the effectof economic trends, financial restructuring and reforms by government, industrializa¬tion, and technology etc. the Capital Market is thereby required to adapt to the constantly changing trends in the economy.
The market in Nigeria has been de¬scribed as being shallow; this is due mainly to the market float that is very small and is measured by the ratio of securities in the market to the total listed securities outstand¬ing. The challenge that lies ahead is to be able to increase and retain as many of our domes¬tic individual and institutional investors as possible and simultaneously attract foreign ones to the Nigerian Capital Market. This can be achieved by being dynamic, innovative, and having an open mind so that new ideas can be absorbed and put productively in use. The market must be in a position to provide a spectrum of investment alternatives, new trading instruments with which investors can hedge their risk, as well as an environ¬ment which is honest, has sufficient struc¬tures and where policies are flexible enough to accommodate different investment needs.

The Capital market has also been char¬acterized by a number of market failures, one of which is asymmetric information, a situation in which one party to a transac¬tion has less information than the other par¬ty. The pervasiveness of this phenomenon greatly undermines the efficiency of finan¬cial markets as mechanisms for allocating resources. Because geography and cultural distance complicate the acquisition informa¬tion, asymmetric information is particularly prevalent globally. While the revolu¬tion in information asymmetric are lessened but not eliminated, therefore they are prone to the sharp investor reactions, unpredict¬able market movements and financial crisis that can occur when information is incom¬plete and financial markets behave errati¬cally (Eichengreen and Musa 1998). Thus, in the absence of complete information, inves¬tors tend to rush in and out of the markets on rumor.

1.2 SCOPE OF THE STUDY
The purpose of the study is to criti¬cally examine and evaluate the impact of the Nigeria Capital Market on the Nigerian economy, ef¬forts would be made to identify and appraise the strengths and weaknesses of the capital Market and attempts made to remedy such. This would be examined from the past, pres¬ent and forecast into the future. Hence thisresearch work isset to examine the impact of the capital market on the Nigerian econo¬my.
1.3 AIM AND OBJECTIVES OF THE STUDY
The aim of this research work is to examine the impact of the Nigerian capital market on the Nigerian Economic Growth from the year 1961 to 2014.The specific objectives are to:
i. Examine if Market Capitalization contributes to Economic growth
ii. Examine All Share index contribute to the Nigeria Economic growth.
iii. Present a work¬ing model, for the Nigerian Capital Market as it relate to the Nigerian Economic Growth.