Effect of Fixed Income Securities on Capital Market Performance
CHAPTER ONE
Objective of the study
The objectives of the studies are;
- To ascertain the effect of interest payment on capital market performance
- To ascertain the effect of fixed return on capital market performance
- To examine the effect of fixed income securities on capital market performance
CHAPTER TWO
REVIEW OF RELATED LITERATURE
An overview of the current situation of the government bond market in Nigeria
This section presents the current status of the Nigerian government securities market vis-a-vis its development compared to other advanced markets. Furthermore, it subsequently analysed the recent evolution of the bond market. The government bond market has a primary market for bonds. It dealers are government selected financial intermediaries whose aim is to promote investment in government bonds and participation in the government securities market (World Bank & IMF, 2001). The market capitalisation of the government bond market in Nigeria is low, thus the need to invest substantially in the financial markets of the Nigerian economy; unlike its other emerging market counterparts especially the Asian and Latin emerging markets, the local bond market in Nigeria is far below in terms of market performance. The aforementioned is because of the low market liquidity, lack of diversification, shallowness, inexistence of institutional investors, lack of proper infrastructure, low capitalisation, few listed companies, and instruments in the Nigerian bond market relative to those of other emerging bond markets in Asia or Latin America. This view was also corroborated by Cassimon, Essers, and Verbeke (2015) who noted the difficulty of local currency bond markets (LCBMs) to grow its investment size and basic financial market infrastructure. In addition, there is an inadequate regulatory framework for the operations of the market. The Nigeria bond market is relatively shallow, inefficient and illiquid, thus, preventing companies from raising funds needed to expand investment in physical and human capital among other goals (Smaoui, Grandes & Akindele, 2017). They added that African bond markets except for South Africa hardly reach their 15-18% of its GDP investment in government securities. This accounts for about 80- 90% of the market capitalisation rate in all markets. The underdeveloped nature of the Nigerian financial system relative to those of the developed countries coupled with the high level of inflation in the system is a plausible reason for the low volume of outstanding government bonds in the country.
CHAPTER THREE
Research methodology
Research Design
The research design adopted in this research work is the survey research design which involves the usage of self-designed questionnaire in the collection of data. Under the survey research design, primary data of this study will be collected from central bank of Nigeria, Oyo state in order to determine the effect of fixed income securities on capital market performance. The design was chosen because it enables the researcher to collect data without manipulation of any variables of interest in the study. The design also provides opportunity for equal chance of participation in the study for respondents.
Population of Study
The population of study is the census of all items or a subject that possess the characteristics or that have the knowledge of the phenomenon that is being studied (Asiaka, 1991). It also means the aggregate people from which the sample is to be drawn.
Population is sometimes referred to as the universe. The population of this research study will be Seventy-five (75) selected staffs of CBN, Oyo state
Sample Size and Sampling Techniques
The researcher made use of stratified sampling technique because all the members have the same probability of occurrence. The researcher narrowed down the samples to CBN staffs in order to access effect of fixed income securities on capital market performance.
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND DISCUSSION
This chapter is about the analysis and presentation of data collected from the field through questionnaire. The analysis of the data with particular question immediately followed by the presentation of findings.
As mentioned in chapter three, 50 questionnaires were administered and 50 were retrieved and necessary analysis was carried out on them.
Data Presentation
This is the presentation of the quantitative data collected from the respondents through the questionnaire drawn-tabulation and percent (%) age will be used to analyze the data accordingly.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain the effect of fixed income securities on capital market performance. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of fixed income securities on capital market performance
Summary
This study was on the effect of fixed income securities on capital market performance. Three objectives were raised which included: To ascertain the effect of interest payment on capital market performance, to ascertain the effect of fixed return on capital market performance and to examine the effect of fixed income securities on capital market performance. The total population for the study is 75 staffs of CBN, Oyo state. The researcher used questionnaires as the instrument for the data collection. Descriptive Survey research design was adopted for this study. The data collected were presented in tables and analyzed using simple percentages and frequencies
Conclusion
The major finding of this study indicates that government bonds and NSE All-Share Index are positively related, and such relationships have a strong and robust effect. Another crucial finding of this study is that the number of listed government bonds is a significant determinant of capital market growth in Nigeria.
Recommendation
First, policymakers in Nigeria should encourage the issuance of more government bonds to the public and further to enhance the efficiency of the capital markets, both primary and secondary. This will in no doubt lead to the mobilization of more funds and have a positive effect on capital market growth. Second, this study reveals that bond market really motivate capital market growth in Nigeria, hence it is crucial that all stakeholders in the private- and public sectors coupled with investors, should engage and promote activities that will enhance bond market development. Thus, efficient markets through the availability of information to the public should be a priority.
References
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