Funds are made available for companies, industries and governments so as to enable them meet their long term monetary requirements. google_ad_client = "ca-pub-9755093768544960"; What are Loan Forgiveness Programs for Nurses and Teachers? Capital market is defined as markets in which money is provided for periods longer than a year.” The major function of a capital market is to channel the wealth of savers to those who can put it into a productive long term use. Receive full access to our market insights, commentary, newsletters, breaking news alerts, and more. CHALLENGES FACING NSE Political instability – frequent cases of insecurity and political intolerance have reduced investor confidence therefore reducing trading in NSE Lengthy listing procedures – need for compliance with certain lengthy procedures before a company is listed discouraging listing i.e. There’s a lot more to Microsoft than Azure, Office 365 and PCs -- three of the products that investors tend to know best. This allows some unorganized companies to perpetrate their unruly and unethical practices. A survey conducted by Morgan Stanley in the third quarter of 2019, for example, found that CIOs anticipated slower growth in IT budgets in 2020 compared to last year. It could contribute around $1 billion in revenue by fiscal 2022, according to Materne. The Nigerian Stock Exchange provides a mechanism for mobilising private and public savings and makes such funds available for productive purposes. Based on past studies, a bear market typically sends stocks down 30-40% and last at least a year to 18 months. THE STOCK EXCHANGE MARKET: CHALLENGES AND PROSPECTS, THE ROLE OF ACCOUNTANT IN THE MANAGEMENT OF SMALL SCALE BUSINESS, THE STRUCTURE, OPERATION AND IMPACT OF NIGERIAN STOCK EXCHANGE ON NIGERIAN ECONOMY, The Developmental Roles of Financial Institution in Economic Development in Abia State, The Role of Internal Control as the Foundation of Quality Management, The Implication of 25 Billion Recapitalization Policy of Central Bank of Nigeria (CBN) on Nigerian Economy, The Effect of Capital Structure on the Profitability of Quoted Insurance Companies in Nigeria, The Efficiency of Education Expenditure in Nigeria (1990 – 2015), Fiscal Accountability Dilemma in Nigeria Public Sector: A Warning Model for Economic Retrogression, Impact of Financial Information on the Profitability of Business Organization in Nigeria, Impacts of Accounting System Common in Public Sector, Problem and Prospect of Financial Control Tool, The Challenges of Rating Valuation in Nigeria, The Impact of Monetary Policy in Nigeria Banking Institution, The Impact of Working Capital Management of the Productivity of a Manufacturing Company. One worrisome metric for Paulsen is low intra-market correlations, which means that there is a wide dispersion in returns among individual stocks. The NSE factbook of 2010/2011 puts the number of individual investors in the stock market at 3million. slower growth in Azure -- 59% compared to 76% in the prior year -- capped gains. I had invested a sum of ₦350,000 in the shares of a particular company in 2007, hoping for a tangible return on investment. Subscribe to our mailing list and get interesting stuff and updates to your email inbox. In the end the clients hopes are dashed when their expectations are not met. But, as in all times of flux, challenges create opportunities. Considering the fact that Nigeria is a country with over 150million inhabitants, this is quite poor. google_ad_width = 300; google_ad_height = 250; InfoGuide Nigeria is a multi-author blog in Nigeria founded by Ifiokobong Ibanga. Action Alerts PLUS is a registered trademark of TheStreet, Inc. Amazon for a large and controversial Pentagon contract. Azure’s share was just shy of 20% as of the third quarter. Given that, stock … A List Of Portfolio Management Tips For Modern Day Trading, 10 Best Loans In Nigeria Without Collateral. Here's how to do that for individual stocks. In this article, I shall be pointing out a number of major challenges facing investors in the Nigerian capital market. "Recent fundamental shifts now raise the possibility that 2019 earnings could decline which would likely be a shock to investors," he warns. A recent note to clients by Credit Suisse finds that the current upsurge in the VIX indicates that "investors no longer see the market correction as a temporary dislocation, but rather driven by more persistent macro risks," as quoted by The Wall Street Journal. There is what appears to be the general opinion that, a vibrant Capital Market contributes immensely to the economic growth and development of any nation. The reason for the low participation is due to the unsavory testimonies of former individual investors which has led to serious doubt about the credibility of the Nigerian capital market. Their customer services are known to be very poor, mails are not returned on time, account statements are not served on time and requests are not processed promptly. And, ultimately, it will be resolved by a bear market and a recession," says Paulsen per Business Insider. Low returns on investment has been identified as another source of problem for individual investors. Stockbrokers in the Nigerian capital market are fond of deceiving clients. An efficient capital market mobilizes savings and allocates a greater proportion to those companies with the highest prospective rates of return after giving due allowance for risk. A bear market for stocks, in which prices drop by … Meanwhile, rate hikes by the Federal Reserve are boosting corporate costs as the Fed is reversing quantitative easing (QE), which propped up equity prices. Performing due diligence means thoroughly checking the financials of a potential financial decision. Get Full Work (adsbygoogle = window.adsbygoogle || []).push({}); Disclaimer: Using this Service/Resources: You are allowed to use the original model papers you will receive in the following ways: 1. The Nigeria Stock Exchange (NSE) is the centre point of the Nigeria Capital Market, while the Securities and Exchange Commission (SEC) serves as the apex regulatory body. For a company to trade in the NSE it must be listed in the stock exchange. This is due to the inadequate supervision and regulation by the responsible bodies. The investing landscape has been vastly transformed so that there are many unique challenges that modern investors face. How Investors can Perform Due Diligence on a Company. For instance in Africa, stock exchange markets have been established in many countries such as Tanzania, Rwanda, Kenya, Swaziland, Botswana, Ghana, Malawi, Zambia, and Uganda. 10 Challenges Facing Investors in the Nigerian Capital Market. The study will also analyse the operation of the Nigerian Stock Exchange, its challenges and prospects, the functions and dealers in the Nigeria Stock Exchange market. "The issues confronting stocks are numerous and most will likely remain periodically problematic for the balance of this expansion. This has discouraged a lot of investors and also made some investors lose thousands and millions of naira in the cause of investing in the capital market. Get Full Work . © 2020 TheStreet, Inc. All rights reserved. The CAPE ratio is a measurement that adjusts past company earnings by inflation to present a snapshot of stock market affordability at a given point in time. And bullish analysts see more upside in the year ahead for the tech giant. The study attempts to analyse and measure the rate of the economic development of the country through quoted company’s level of capitalisation, value indices of common stocks, growth in the number of listed securities and Gross Domestic Product. These include trailing P/E ratios and price/sales ratios for the S&P 500 Index (SPX), the ratio of total U.S. stock market capitalization to GDP, as well as the CAPE ratio. 9 Tips to Live a Comfortable Life While Saving Money. Nigerian Stock Exchange market has a role to play through a periodic performance evaluation of quoted companies for adequate and efficient generation of income. Your email address will not be published. FACEBOOK TWITTER LINKEDIN By Mark Kolakowski. Microsoft's performance this year could be determined in part by further growth in Azure, execution on key strategic initiatives, and ability to weather any potential pullback in corporate tech spending. Microsoft - Get Report investors had a stellar 2019, and are certainly hoping for a repeat performance in 2020. The content on the InfoGuide Nigeria is provided as general information only. Prior to 1989 there were just five stock markets in sub-Saharan Africa and three in North Africa. In the back half of last year, some investors worried that slowing economic growth in the U.S. and elsewhere could go hand-in-hand with a pullback in enterprise tech spending. There are cases where an investment of over five years yields well below the expected return. This is another problem investors face and another reason why individual investors are not likely to return after such a distasteful experience. For one, investor sentiment can change quickly – and that leads some analysts to favour shares in Germany-based Deutsche Boerse AG.The theory is that Deutsche Boerse stock… Procedures and Steps For Buying Shares In Nigerian Capital Market. It is always very difficult to get feedbacks after making enquiries from most of the brokerage firms available in the country. Consequently, resolving 'problems aplenty' will not be easy.