Functions of The Stock Exchange
(Over 20 years investing experience in Nigeria’s financial markets)
The stock exchange is expected to perform the following roles:
- Provide a forum for members to buy and sell securities or grant quotation to new ones.
- Provide an opportunities or facilities for raising new capital.
- It helps to reduce liquidity in the economy by facilitating the purchase and sale of securities of all types.
- It protects the investing public from shady dealings and sharp practices through its rules, regulations and operational codes.
- The exchange facilitates dealing in government securities.
- Stock exchange encourages people to save.
- The stock exchange serves as a medium for the dissemination of information to industrialists and investors.
8. The prices quoted in the stock exchange can serve as economic indicators.
9. It assists government in implementing its monetary policies.
10. Prices quoted on the stock exchange can serve as a parameter for investors to measure the goodwill of their companies.
11. The stock exchange advises the government, industrialists and investors that deal in securities.
12. By giving shares an introduction to the exchange, the stock exchange assists private companies to go public without issuing new shares.
13. It encourages members of the public to invest in viable business ventures.
14. The stock exchange makes long term funds available to public companies.
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Did you know?
That the Lagos Stock Exchange that metamorphosed into the Nigerian Stock Exchange is the first stock exchange in West Africa and the sixth in Africa.
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Memorable investment quotes.
My obsession for stocks dates back to June 1961, as a lower six student in King’s College Lagos. My Economics teacher Mr. Osunkiyesi, used to regale us in the class about stocks in relations to mobilising saving for investment and development. My Economics teacher made so much sense in my impressible mind that, today his memory remains one of the factors responsible for my obsession for stocks.
– Akintunde Asalu.
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