ABSTRACT

A buoyant and dynamic economy is the one built upon a sound financial system. Such financial system should be stimulated and maintained by the effective activities of an efficient capital market. The stock exchange therefore is the market where companies raise capital on a short term and long term basis. This role of mobilization and allocation of funds to every sector of the economy which made it (Stock Exchange), the toast of investors has given it a pride of place in every economy(Mohtadi and Agarwal, 2001). There is no doubt, that the success or failure of every sector in the economy rests to every large extent on its stock exchange market. This is because for any sector in the economy to grow, an efficient means of capital formation must not be ignored considering the importance of capital in any organization setting. Since the establishment of the Nigerian stock exchange (NSE) some forty two years back (42) elements of stagnation, dormancy and unproductiveness in the economy is being experienced despite the tremendous development in the exchange systems. This situation has taken a worrisome dimension in which many questions are being raised on the relevance of the Nigerian stock exchange in facilitating investments in the Nigerian economy(Osinubi, 2001).