Finance

10 Functions Of The Nigerian Stock Exchange

The Nigerian Stock Exchange NSE, was established with a particular purpose in the mind of the Nigerian government, and the purpose however, was to control the flow of money in the country, as well as, regulate on how money should flow in the country with a view to ensure that, favourable condition is provided for such organizations and those individual entrepreneurs  who engaged in trade, and those who invested money in shares with primary  purpose of making profit.
Without much ado however, in this article, I will be explaining some of the functions of the Nigerian Stock Exchange, and going through them, you will come to discover by yourself as to why the Nigerian Stock Exchange NSE was established in Nigeria.
10 Functions Of The Nigerian Stock Exchange
The Nigerian Stock Exchange – Photo Source:https://www.von.gov.ng

What Then Are The Functions Of The Nigerian Stock Exchange?

The Nigerian Stock Exchange, at creation, was assigned with a number of functions to help drive its mandate, which I have mentioned earlier, which of course, was to regulate and control the flow of money in Nigeria.
To achieve this mandate, the Nigerian Stock Exchange was to carry out a number of functions, and in this article, I am going to explain quite a number of them.

The Nigerian Stock Exchange Provides Platform For Selling And Buying Of Securities:

The Nigerian Stock Exchange has been saddling with the responsibility of providing forum for every participant and member to buy securities, and also sell securities.
Under this responsibility on the part of the Nigerian Stock Exchange, the NSE is also expected to ensure that, quotations of new companies are granted. This, over the years, has remained a key function of the Nigerian Stock Exchange.

The Nigerian Stock Exchange Provides Opportunities For Raising New Capital:

The Nigerian Stock Exchange has also worked to make sure that, there are opportunities available for new capital to be raised.
The Nigerian Stock Exchange is expected to provide facilities that will help enhancing raising of new capital. Once this is happened, the Nigerian Stock Exchange will directly help in deducing liquidity in the Nigerian economy through the purchase and the sale of all types of securities.

The Nigerian Stock Exchange Protects Investing Public From Sharp And Shady Dealings

Another function of the Nigerian Stock Exchange has been to ensure that investing public are protected from those, who indulged in sharp practices in the money market in the country.
Shading investing public from prevalent shady dealings is fundamentally, the function of the Nigerian Stock Exchange. The Nigerian Stock Exchange has however, achieved this through its rules, and regulations and with its operational codes.

The Nigerian Stock Exchange Facilitates Dealings In Government Securities

Functions of the Nigerian Stock Exchange are numerous. Take for instance, dealing in government securities are facilitated by the Nigerian Stock Exchange. NSE must make sure that, such leadings are facilitated in order to meet the objectives as set by the government.

The Nigerian Stock Exchange Encourages Savings

Again, another function of the Nigerian Stock Exchange is to encourage savings among Nigerian citizens. Savings, of course you know, is very important and necessary especially, during hard times and economic recession. And besides this, it also helped in boosting economy.

The Nigerian Stock Exchange Disseminates Information To Industrialists

Another function of the Nigerian Stock Exchange has been also revolved around information dissemination to entrepreneurs and  industrialists including investors in Nigeria.
This aspect of the Nigerian Stock Exchange’s function is very peculiar, since it has helped engender superior ideas, upgrade skills and knowledge on the current trend of doing business in this sector.

The Nigerian Stock Exchange Assists Government To Implement Monetary Policies

One vital or key function of the Nigerian Stock Exchange is in the area of assisting the government to implement monetary policies.
We have been told that the Nigerian Stock Exchange was founded for the purpose of helping in the control and regulation of how money flows in Nigeria.
And going by this peculiar responsibility on the part of the Nigerian Stock Exchange, the NSE is expected to assist and ensure that, the government policies regarding money are appropriately implemented in the country.

The Nigerian Stock Exchange Provides Parameter For Measuring Companies’ Goodwill

The Nigerian Stock Exchange has over the years, involved in practices that have helped in putting parameter in place for investors operating in Nigeria to  measure companies’ goodwill in Nigeria.
The Nigerian Stock Exchange does this through quoted prices on the Nigeria’s stock exchange. One can now see how investors have been able to measure the goodwill of companies operating in Nigeria through the activities of the Nigerian Stock Exchange.

The Nigerian Stock Exchange Advises Government And Investors And Industrialists

It has been one of the functions of the Nigerian Stock Exchange to advise government on monetary policies. Through the input of the Nigerian Stock Exchange, the government has been able to formulate appropriate policies regarding flow and circulation of money in the country.
The Nigerian Stock Exchange also advised investors operating in Nigeria, as well as, the industrialists, particularly those dealing in securities. The Nigerian Stock Exchange has always ensured that, these monetary policies are implemented accordingly.

The Nigerian Stock Exchange Fights Against Inflation

Another key function of the Nigerian Stock Exchange is in the area of fighting inflation in the country. The Nigerian Stock Exchange deserved commendation in this regard.
Its activities have helped in the control of money inflow and money outflow in Nigeria through investment. The Nigerian Stock Exchange activities have been considered effective tool in fighting against inflation in Nigeria.
Therefore, without any gainsaying, the Nigerian Stock Exchange has been able to minimize and/or reduce the rate of inflation in the country through the roles it has played.

Conclusion

Going by the functions of the Nigerian Stock Exchange, if for instance, there is no proper control and regulation of how money flows in Nigeria, by the Nigerian Stock Exchange, the situation would have been pathetic, since this would perhaps, be in the hands of the public. But if this happened however, there would be a decline in the growth of Nigerian economy.

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Joseph Athanasius

Joseph Athanasius is a Content Developer at InfoGuideNIgeria.com. InfoGuide Nigeria is a team of Resource Persons and Consultants led by Ifiokobong Ibanga. Page maintained by Ifiokobong Ibanga. If you need a personal assistance on this topic, kindly contact us.

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