STOCK MARKET CAPITALISATION AND INTEREST RATE REGIME UNDER A DEMOCRATIC EXPERIMENT

ABSTRACT

Stock market capitalisation rate simply means the discount rate used to determine the present value of future earnings in the capital market while interest rate means opportunity cost of borrowing. This study examines the relationships between stock market capitalisation rate and interest rate. The study reveals that the prevailing interest rate exerts positives influence on stock market capitalisation rate. Government development stock rate exert negative influence on stock marketing capitalisation rate and prevailing interest rate exerts negative influence on government development stock rate. This study further reveals information as of great value to capital market development and therefore recommended that the operator of the Nigeria Capital Market should raise the level of awareness so that investors will become familiar with the happening in the market.

TABLE OF CONTENTS

Declaration. iii

Certification. iv

Dedication. v

Acknowledgementvi

Abstractviii

Table of Contentsix

CHAPTER ONE. 1

1.0 Introduction. 1

1.1 Background of the Study. 3

1.2 Statement of Problem.. 4

1.3 Objectives of the Study. 5

1.4 Scope of the Study. 5

1.5 Limitation of the Study. 6

1.6 Significance of the Study. 6

1.7 Research Questions6

1.8 The Hypothesis of the Study. 7

1.9 Definition of Terms8

CHAPTER TWO. 9

2.0 Literature Review and Conceptual Framework. 9

2.1 Money Market and Capital Markets Definition. 9

2.2 How to Access the Nigerian Capital Market NCM12

2.3 The Relationship of the Stock Exchange and Capital Market13

2.4 The Role of Government in the Capital Market16

2.5 Stock Market Efficiency: The Nigerian Experience. 19

2.6 Appraisal of Current Reforms in the Capital Market25

CHAPTER THREE. 33

3.0 Research Methodology. 33

3.1 Introduction. 33

3.2 Sources of Data Collection. 33

3.3 Data Analysis Techniques34

3.4 Test of Reliability and Validity. 35

CHAPTER FOUR. 36

4.0 Data Presentation and Analysis36

4.1 Data Presentation. 36

4.2 Data Analysis36

4.3 Testing of the Hypothesis Formulated. 50

CHAPTER FIVE. 55

5.0 Summary, Conclusions and Recommendations55

5.1 Summary of Findings55

5.2 Conclusion. 57

5.3 Recommendations58

5.4 Suggested Areas of Further Studies60

Bibliography. 61

Appendix. 62