Challenges Facing Investors in The Nigerian Capital Market. In this article, you will see the problems facing investors in the Nigerian Capital market today.
What Is Capital market in Nigeria
The Nigerian capital market is principally a market for long-term investments where corporate equities and long-term debt securities are issued and traded. It is a market that is regulated by the Securities and Exchange Commission (SEC), which is the apex regulatory body of the Nigerian Capital Market.
See Also: Top 10 Functions of The Nigerian Stock Exchange Market
Are you an aspiring investor? Do you wish to know the problems facing the Nigerian capital market? Then this is the right place as a number of problems facing investors in the Nigerian capital market has been outlined.
First, it is important to know the basics of who an investor is and what the capital market is for full understanding of this topic. I have carefully and briefly outlined some of these basics to help you.
What is the history of capital market?
Capital Market History. The world’s first stock exchange was established in Antwerp, Belgium in 1460 under the rule of Philip the Good. It mainly traded financial securities, primarily bonds. Brokers and moneylenders would meet there to deal with business, government and even individual debt issues.
What is an example of a capital market?
A capital market is an organized market in which both individuals and business entities (such as pension funds and corporations) sell and exchange debt and equity securities. … Examples of highly organized capital markets are the New York Stock Exchange, American Stock Exchange, London Stock Exchange, and NASDAQ.
Who is an Investor?
An investor is one who gives capital and expects future gains or profit from the capital. It should be noted that an Investor who possesses a stock is known as a share holder.
Do we have different types of investors?
Yes there are mainly two types of investors which are:
- Institutional investors: This type of investor plans pension on behalf of the employees. They also manage large money, in charge of businesses that make investment by captive fund or directly.
- Retail investors: These are individual investors. They can also be seen as Angel investors or sweat equity investors.
What are the type of investments?
We have several types of investments which are:
- Debt securities
- Real estate
What is Capital Market?
Capital Market can simply be seen as a type of market which money is the major dealing. This means that money is always available in this type of market.
How many sectors do we have in the capital market?
We have two sectors in the capital market and they are:
- Primary market which deals with fund raising
- Secondary market which allows the fund to go to the investor(s).
The important point to note here is that these two sectors work hand in hand to compliment each other.
What is the function of the Capital market?
The major function of the capital market is to provide and push the savers or investors wealth to people who can productively use it for a long period of time.
What are the problems or challenges facing the investors in the Nigerian Capital Market?
The investors in the Nigerian capital market face a number of challenges which how perpetually slowed down the growth of the capital market. A research was conducted in Nigeria in which a number of problems were outlined and given to some investors to choose the challenges they go through.
These problems have properly been outlined and are self explanatory for proper understanding. It is important to note that these problems outlined were the highest picked problems.They are:
- Huge cost of transactions
- Low level of transparency
- Lack of adequate Supervision
- Financial global crisis
- Crash of the capital market
- Lack of proper protection of investors
- Share price manipulation
- Low returns from investment
- Insincere and dishonest stockbrokers
- High share price
- Paucity of investible funds
- Inefficiencies of registrars
- Inadequate information about listed companies
- Bad policy
- Bad Customer service