Effects of Finanacial Crises on Nigerian Capital Market

INTRODUCTION With its roots in banking, the sub-prime mortgage crisis that commenced in the United States in 2007 soon resonated in other sectors of its financial system, and the economy, at large. It spread quickly to the developed economies in Europe, including the United Kingdom, and Asia -with Japan becoming well affected. The emerging economies were not isolated. A transmission channel of the global financial crisis, which has been referred to as the â€Å"Globalised Synchronized Slowdown† is the stock market SERE-EJEMBI, (2008). Around the world stock market indicators started falling. The capital market, vis-à  -vis the stock market, is a channel through which national economies receive foreign capital flows that make their tendency†¦show more content†¦5 in ESCWA (2009)). In an attempt to curb falling prices, the Organization of Petroleum Exporting Countries (OPEC) introduced a series of cuts in output. At the time of writing, oil prices have begun to stabilize at levels ranging in the mid US$ 40 per barrel and also there was withdrawal of investment from foreign investors or huge capital outflow In Nigeria — Africa s largest exporter of crude oil which amounts to 80 percent of its earnings, the impact of the credit crunch has been enormous, the 3.1-trillion-naira-budget is in deficit. illiquidity and Credit crunch leading to confidence crisis, weak consumer demand, Sub-prime crisis of 2007 and breakdown of confidence in the banking system, De-leveraging and banks inability to improve capital adequacy, Possible protracted recession in the US and Europe with upturn expected perhaps in 2010 and 2011, Declining real output growth—slowed economic growth (threat of global recession), Weakened financial systems—takeovers and bankruptcy, Loss of jobs, Loss of confidence in financial markets- leading to inability to carry out their intermediation role in the economy, Stock Market Crashes omyiuke (2010) OBJECTIVE OF STUDY The main objective of this paper is to examine the impact of global financial crises on the Nigerian capital market, other specific objectives include; * To evaluate the