AN EVALUATION OF THE PERFORMANCES OF NIGERIA CAPITAL MARKET BEFORE AND AFTER BANKING SECTOR CONSOLIDATION EXERCISE (2001-2010)

Abstract

Capital market as a vehicle for channeling investment opportunities played a vital role in achieving greater economic activities in Nigeria, its major role is identifying alternative sourcing to where capital is lagging. The Nigeria Capital market met the demand of some Nigeria banks by issuing fresh funds during consolidation exercises to meet the minimum requirement of N25 billion capital base as set by the Central Bank of Nigeria, without endangering themselves into mergers or acquisitions. The performance of the market in the economy prior to and after consolidation is a matter of concern especially to share holders who are always losing their confidence on the operations of the market. The objective of the study is to determine the level of difference in terms of performance of the market before and after consolidation. In trying to achieve this objective, secondary data was employed and T-test was used to determine the level of the mean difference between the two periods at 95% confidence level. The study found that despite the capital market performed well during post consolidation, yet investor’s confidence are at stake. The study recommended that the Nigerian capital market
should regulates its activities and employ more strict measures that will ensure investors confidence.