ABSTRACT

Capital market is the portion of the financial market which deals with sourcing of long term funds for productive purposes. The market consists of primary and secondary markets. In the former, new issues are traded were the latter deals with already existing shares/issues, with trading taking place on the stock exchange floor. The security and exchange commission regulates activities in the capital market. The aim of the research was to show the effect of capital market on the Nigerian Economy. Period covered was 1985 to 2004. Percentage change in capital value index was used to represent activities of the capital market and represent the independent variable. The gross domestic product percentage change stood in for the Nigeria Economy and was the dependent variable. Hypothesis was carefully formulated based on the above.