Impact of Information and Communications Technology on the Operations of the Nigerian Capital Market
This study identified operational activities of the Nigerian Stock Exchange (NSE) and the extent of the use of Information and Communications technology (ICT) for the enhancement of its operations. This was with a view to assessing the impact of ICT on the performance of ICT. The data for the research were obtained from both primary and secondary sources. Primary data were collected using structured and unstructured questionnaire backed up by interview and observations. Twenty five (25) Stock- broking firms were purposely selected from the two hundred and seventeen (217) registered in the Stock Exchange based on their, operational capacity, age, spread and experience. In each of these Stock broking firms fifteen (15) investors were also purposely selected based on their net worth. A total of three hundred and seventy five (375) respondents. Other respondents from various groups working in the Stock Exchange were randomly selected. These were from: Corporate Law firms, Facility back-up providers, Reporting Accountants and the Nigerian Stock Exchange Staff – a total of twenty (20) respondents and twenty five (25) Jobbers and Dealers in the Stock Exchange were selected. Altogether the total sampled size was four hundred and twenty (420). The study showed that all operational activities of the NSE had became automated in all the selected Stock-broking firms. Identified was a switch from manual call over system to Automated Trading System (ATS). Also introduced to the operation of NSE were Central Securities Clearing System (CSCS), Trade Alert (TA) and Remote Trading (RT). These technical changes brought about increased level of confidence in the stock exchange. Majority of the respondents (70%) expressed much higher degree of confidence in ICT-backed NSE operation. The result also showed that All Share Index (ASI) and Market Capitalization (MC) were positively correlated. The degree of correlation was high in the post automation era (r = 0.94, t = 1306, P < 0.05) than pre automation era where r = 0.75 (t = 96, p < 0.05). The Mean All Share Index also showed better performance in the post automation era than pre automation era. (t = 3.93, P < 0.05). The study concluded that Automated Trading System and Central Securities Clearing System had brought increase in the confidence level of the investors and consequent increase in the volume of activities owing to transparency and promptness of service delivery that ICT has provided.