INFORMATION TECHNOLOGY AND THE PERFORMANCE OF THE
NIGERIAN STOCK EXCHANGE
ABSTRACT
This research work is aimed at studying Information Technology and the Performance of the Nigeria Stock
Exchange with a particular reference to the Nigerian Stock Exchange Kaduna.
The objective of the study is to analyze the activities of the Nigerian Stock
Exchange to see how effectively and efficiently it has satisfied the company’s
financial demand and to identify the problems if any that have affected it
performance in the past. Relevant literatures were reviewed from textbooks and
journals relating to capital market and its contribution to industrial
development in developing countries like Nigeria. In collection of data,
questionnaire and personal interview and research instrument were used as
instruments. Data collected through the questionnaires were analyzed. The
result of the analysis collected led to the findings and conclusion was drawn
on them. Recommendations were made in respect of improving the efficiency and
public image through the provision of some vital patterns necessary for the
success of Nigeria Stock Exchange in the economy.
TABLE OF CONTENTS
CHAPTER ONE
1.0
Introduction 1
1.1
Background of the Study 1
1.2
Statement of the Problems 3
1.3
Objectives of the Study 5
1.4
Research Hypothesis 6
1.5
Significance of the Study 6
1.6
Scope of the Study 7
1.7
Historical Background of the Case Study 7
1.8
Definition of Terms 9
CHAPTER TWO
2.0
Literature Review 11
2.1
Introduction 11
2.2
Historical Development of Computer 11
2.3
Definition of Information Technology 17
2.4
Meaning of Stock Exchange 18
2.5
Role of Information Technology in
Nigerian Stock
Exchange 27
2.6
Role of Nigerian Stock Exchange in
Economic Development 30
CHAPTER THREE
3.0
Research Methodology 33
3.1
Introduction 33
3.2
Population and Sample Size 33
3.3
Sources and Method of Data Collection 34
3.4
Methods of Data Analysis 36
3.5
Justification for the Choice 36
CHAPTER FOUR
4.0
Data Presentation, Analysis and Interpretation 38
4.1
Introduction 38
4.2
Data Presentation and Analysis 39
4.3
Test of Hypothesis 43
4.4
Summary of Findings 44
CHAPTER FIVE
5.0
Summary, Conclusion and Recommendations 47
5.1
Summary 47
5.2
Conclusion 48
5.3
Limitations of the Study 49
5.4
Recommendations 50
Bibliography 52
Appendix I 54
Appendix II 55
CHAPTER ONE
1.0
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
The use of computer
in business transaction is growing day by day and it is widely use. It is
common in most part of the country and the world itself is becoming a global
village. Information technology most especially in the area of computer and
communication network has incorporated in most all aspect of business
activities today. It has been found to be effective, efficient, fast and
reliable.
Computers are fast
and also easier to use that is why organizations have adopted the use of
computers in business transaction. Nigerian stock exchange adopted the use of
information technology by using computer in their day to day transaction, they
also use internet in carrying out their transaction by communication with
stakeholders globally.
The internet is
basically a vast and ever increasing network of computers across the globe that
is interconnected over existing telecommunication network. That is, it is a
network or networks. World over the term of world internet has become a
household thing. It is a mega tool in the world of information technology that
has shattered the defensive barrier of time, space and language thereby
compressing the world into a global village the services of the internet
include electronic commerce, electronics banking, electronic library etc.
The Nigerian Stock
exchange was incorporated in 1960 as the Lagos Exchange in December 1977, it
becomes Nigerian Stock Exchange with branches established in some of the major
commercial used of this technology in their day to day transaction because of
the increase of customers, these technologies make their work fast and easier
to operate.
Although, a lot has
been done by organizations and companies in the field of information technology
adequate attention has not been paid on the performance of Nigerian Stock Exchange
in Yola Zonal Office to determine the impact of information technology and its
implementation in business transaction towards enhancing service delivery. Some
of these problems are inadequate information technology facilities like the
need for more vaster internet portal to be procured and install to make it
adequate. The present situation in which the offices have linked to Lagos to participate in
trading everyday do not means well for the general progress of the exchange.
The research
therefore aimed at taking a closer look at some of these facilities, its
performance in business transaction and implementation in enhancing services
delivery.
1.2
STATEMENT OF THE PROBLEMS
Computerization is a
world phenomenon and is now taken for granted as an indispensable companion in
financial structure of any independent and dependent organization. In Nigeria as a
whole it is merely about Thirty-nine (39) years old one may wonder without
computer as they have been doing before.
Looking generally at
the operation of computer in the Nigerian Stock Exchange one could notice some
problems of the computer section of the stock exchange.
The specialized
nature of the job which involves staff with a high degree of skill in the
computer field. The services rendered to customers are very poor and has to be
improved because customers waste a lot of time before making a transaction
manually, which is now lying in the hands of the section.
The computer section
in the stock exchange is left the task of preparing the customer reports
instead of leaving it to account department which lead to serious
misunderstanding between the computer staff and account staff.
The manual data processing
method in the Nigerian Stock Exchange has the following as its shortcomings.
1)
The method involves much paper work
2)
It is time consuming and tedious
3)
There are always calculation errors
4)
It waste customers valuable time
5)
Customers file cannot be easily updated
6)
Staff are being overworked and close late
1.3
OBJECTIVES OF THE STUDY
The main objective of
this study is to determine the need for computer communication system and the
performance of Nigerian Stock Exchange. The following are the specific
objectives:
i)
To find out how the Nigerian Stock Exchange use computers in their
business transaction.
ii)
To find out how internet that is world wide network of computers has
help in business transaction and service delivery.
iii)
To find out how trading is done on the floor of the Nigerian Stock Exchange
using the communication system that is mobile phone.
1.4
RESEARCH HYPOTHESIS
A hypothesis is an
idea, suggestion, put forward as a starting point for reasoning or explanation
it also refer to opposition made as a starting point for further investigation
from facts known it is also a conceptive statement of the relationship between
two or more variable.
There are basically
two method of testing hypothesis, which would be used as basis on which the
result would be drawing.
a)
Alternative Hypothesis (H1): The information technology plays a vital role in
the improvement of the Nigerian Stock Exchange.
b)
Null Hypothesis (H0): The information technology does not, play a vital
role in the improvement of the Nigerian Stock Exchange.
1.5
SIGNIFICANCE OF THE STUDY
The essence of this
research work is to determine the use of computers on the trading floor of the
Nigerian Stock Exchange and also to find out the use of internet and how it has
helped capital market stakeholders in monitoring their shares o the floor of
the exchange to know how far they have gone as far as information technology is
concerned and to improve on their services for the betterment of the company.
1.6
SCOPE OF THE STUDY
The research intended
to cover the overall head office of the Nigerian Stock Exchange Laos but for
certain constraint the researcher restricted it to the Nigerian Stock Exchange
Kaduna Zonal Office. This work will focus on the effects of information
technology on the performance of Nigerian Stock Exchange. In view of this, the
researcher limited his study to the relevant information obtained from Nigerian
Stock Exchange and view of relevant literature.
1.7
HISTORICAL BACKGROUND OF THE CASE STUDY
The Nigerian Stock
Exchange was established in 1960 as the Lagos Stock Exchange. In December,
1977, it became the Nigerian Stock Exchange with branches established in
different part of the country.
Presently, there are
seven branches of the Nigerian Stock Exchange in which each branch has a
traditional floor that of Lagos (branch) was
opened in 1996, Kaduna 1978, Port
Harcourt 1980, Kano branch 1989, Onitsha was February 1990, and Ibadan
August, 1990, Abuja area office in 1999, where Lagos is the Head Office
of the Exchange.
However, the exchange
which started with only nineteen (19) securities made up of 34 Federal
Government Stock, 62 Industrial Loan (debenture) and preference stock and 183
equity/ordinary shares of companies all with a total market capitalization of
approximately N170.00 Billion. Most of
listed companies have foreign and multinal applicational and represent a
profile of the various sector of the economy ranging from automobile banking,
airline, breweries through pharmaceutical to agro-allied publishing, textile,
petroleum and insurance companies.
Furthermore, they
have in place a tested stock market network of 153 stock brokerage firms (as at
August, 1995) issuing houses (merchant banks) practicing cooperate law firms
and over 50 quality firms of auditors and reporting accountants most with
internal banks it is a recognized fact that the stock exchange and most of the
nation’s stock broking firms and issuing houses are staffed with creative
financial engineers that can compete anywhere in the world. They therefore have
a network of intermediating and creditably meet the challenges and growing
needs for foreign investors, the stock exchange has a year of grand history,
which is devoid of any fraud, stocks, scandal or any insider dealings.
1.8
DEFINITION OF TERMS
Security: These are written or printed document by which claim of holders specified
properly are secured. This could be stock, shares bond, debenture.
Investor: Is a person in an institution that uses saving or borrowing to buy
securities.
Stock Brokers: Is people who buy and sell securities on behalf of inventors for a
commission called brokerage.