CHAPTER ONE
1.
INTRODUCTION
1.1.
BACKGROUND OF THE STUDY
The use of computer in business transaction is
growing day by day and it is widely use. It is common in most part of the
country and the world itself is becoming a global village. Information
technology most especially in the area of computer and communication network
has incorporated in most all aspect of business activities today. It has been
found to be effective, efficient, fast and reliable.
Computers are fast and also easier to use that is
why organizations have adopted the use of computers in business transaction.
Nigerian stock exchange adopted the use of information technology by using
computer in their day to day transaction, they also use internet in carrying
out their transaction by communication with stakeholders globally.
The internet is basically a vast and ever
increasing network of computers across the globe that is interconnected over
existing telecommunication network. That is, it is a network or networks. World
over the term of world internet has become a household thing. It is a mega tool
in the world of information technology that has shattered the defensive barrier
of time, space and language thereby compressing the world into a global village
the services of the internet include electronic commerce, electronics banking,
electronic library etc.
The Nigerian Stock exchange was incorporated in 1960
as the Lagos Exchange in December 1977, it becomes Nigerian Stock Exchange with
branches established in some of the major commercial used of this technology in
their day to day transaction because of the increase of customers, these
technologies make their work fast and easier to operate.
Although, a lot has been done by organizations
and companies in the field of information technology adequate attention has not
been paid on the performance of Nigerian Stock Exchange in Yola Zonal Office to
determine the impact of information technology and its implementation in
business transaction towards enhancing service delivery. Some of these problems
are inadequate information technology facilities like the need for more vaster
internet portal to be procured and install to make it adequate. The present
situation in which the offices have linked to Lagos to participate in trading
everyday do not means well for the general progress of the exchange.
The research therefore aimed at taking a closer
look at some of these facilities, its performance in business transaction and
implementation in enhancing services delivery.
1.2.
STATEMENT OF THE PROBLEMS
Computerization is a world phenomenon and is now
taken for granted as an indispensable companion in financial structure of any
independent and dependent organization. In Nigeria as a whole it is merely
about Thirty-nine (39) years old one may wonder without computer as they have
been doing before.
Looking generally at the operation of computer in
the Nigerian Stock Exchange one could notice some problems of the computer
section of the stock exchange.
The specialized nature of the job which involves
staff with a high degree of skill in the computer field. The services rendered
to customers are very poor and has to be improved because customers waste a lot
of time before making a transaction manually, which is now lying in the hands
of the section.
The computer section in the stock exchange is
left the task of preparing the customer reports instead of leaving it to
account department which lead to serious misunderstanding between the computer
staff and account staff.
The manual data processing method in the Nigerian
Stock Exchange has the following as its shortcomings.
1)
The method
involves much paper work
2)
It is time
consuming and tedious
3)
There are
always calculation errors
4)
It waste
customers valuable time
5)
Customers
file cannot be easily updated
6)
Staff are
being overworked and close late
1.3.
OBJECTIVES OF THE STUDY
The main objective of this study is to determine
the need for computer communication system and the performance of Nigerian
Stock Exchange. The following are the specific objectives:
i)
To find out
how the Nigerian Stock Exchange use computers in their business transaction.
ii)
To find out
how internet that is world wide network of computers has help in business
transaction and service delivery.
iii)
To find out
how trading is done on the floor of the Nigerian Stock Exchange using the
communication system that is mobile phone.
1.4.
RESEARCH HYPOTHESIS
A hypothesis is an idea, suggestion, put forward
as a starting point for reasoning or explanation it also refer to opposition
made as a starting point for further investigation from facts known it is also
a conceptive statement of the relationship between two or more variable.
There are basically two method of testing
hypothesis, which would be used as basis on which the result would be drawing.
a)
Alternative Hypothesis (H1): The information technology plays a vital role in
the improvement of the Nigerian Stock Exchange.
b)
Null Hypothesis (H0): The information technology does not, play a vital
role in the improvement of the Nigerian Stock Exchange.
1.5.
SIGNIFICANCE OF THE STUDY
The essence of this research work is to determine
the use of computers on the trading floor of the Nigerian Stock Exchange and
also to find out the use of internet and how it has helped capital market
stakeholders in monitoring their shares o the floor of the exchange to know how
far they have gone as far as information technology is concerned and to improve
on their services for the betterment of the company.
1.6.
SCOPE OF THE STUDY
The research intended to cover the overall head
office of the Nigerian Stock Exchange Laos but for certain constraint the
researcher restricted it to the Nigerian Stock Exchange Kaduna Zonal Office.
This work will focus on the effects of information technology on the
performance of Nigerian Stock Exchange. In view of this, the researcher limited
his study to the relevant information obtained from Nigerian Stock Exchange and
view of relevant literature.
1.7.
HISTORICAL BACKGROUND OF THE CASE STUDY
The Nigerian Stock Exchange was established in
1960 as the Lagos Stock Exchange. In December, 1977, it became the Nigerian
Stock Exchange with branches established in different part of the country.
Presently, there are seven branches of the
Nigerian Stock Exchange in which each branch has a traditional floor that of
Lagos (branch) was opened in 1996, Kaduna 1978, Port Harcourt 1980, Kano branch
1989, Onitsha was February 1990, and Ibadan August, 1990, Abuja area office in
1999, where Lagos is the Head Office of the Exchange.
However, the exchange which started with only
nineteen (19) securities made up of 34 Federal Government Stock, 62 Industrial
Loan (debenture) and preference stock and 183 equity/ordinary shares of
companies all with a total market capitalization of approximately N170.00 Billion. Most of listed companies
have foreign and multinal applicational and represent a profile of the various
sector of the economy ranging from automobile banking, airline, breweries
through pharmaceutical to agro-allied publishing, textile, petroleum and
insurance companies.
Furthermore, they have in place a tested stock
market network of 153 stock brokerage firms (as at August, 1995) issuing houses
(merchant banks) practicing cooperate law firms and over 50 quality firms of
auditors and reporting accountants most with internal banks it is a recognized
fact that the stock exchange and most of the nation’s stock broking firms and
issuing houses are staffed with creative financial engineers that can compete
anywhere in the world. They therefore have a network of intermediating and
creditably meet the challenges and growing needs for foreign investors, the
stock exchange has a year of grand history, which is devoid of any fraud,
stocks, scandal or any insider dealings.
1.8.
DEFINITION OF TERMS
Security: These are written or printed document by which
claim of holders specified properly are secured. This could be stock, shares
bond, debenture.
Investor: Is a person in an institution that uses saving
or borrowing to buy securities.
Stock
Brokers: Is people who buy
and sell securities on behalf of inventors for a commission called brokerage.
Automated
Trading System: This is
where the buying and selling of shares is done on computer. The computer
automatically does the transaction.
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