EXPOSITORY ESSAY : THE CAPITAL MARKET OPERATORS AND FUNCTIONALITIES AUTHOURED BY ANIAGOR HENRY

THE CAPITAL MARKET OPERATORS AND FUNCTIONALITIES_Aniagor Henry:

     The various financial markets can be distinguished from one another by the length of loan it grants.This,broadly speaking,the capital market is a market for long term loans.It would probably be more accurate,however,to describe the capital market as not only for long term,but also for short term and permanent loans to the Government,Industry and Commerce.It is a frame work,which facilitates the transfer of claims to financial assets between economic units.The outstanding function of this market is to act as a channel or an instrument for the investors,who have surplus funds to the investors who have difficult funds.Some of the financial instruments that are traded in the capital markets are;equity,insurance,foreign exchange,hybrid and derivative instruments.

    Now,from the above deductions,we can deduce that the capital market operators are the financial institutions in the capital market.
These include;the Stock Exchange Markets(SEM),the Mortgage Banks,Investment Banks,Insurance Companies,Development Banks,Savings Banks,Issuing houses,National Provident Funds(NPF).
    Moreover,the Stock Exchange Market(SEM),as an operator,is the most outstanding and visible sign of the capital market.This market is a highly organised market where investors can buy and sell existing securities,like shares,stocks,debentures and government bonds.The two agents in this market are stock brokers and jobbers,where the jobbers is the main dealer or agent and does transaction with the broker and not the public.The brokers in turn deal directly with the public by selling securities and shares on behalf of his client.With regards to stock market,only a few African economies have formal outstanding stock market.These include; South Africa,Nigeria,Ghana,Kenya and some countries of North Africa.Out of the afore-mentioned economies,Nigeria has one of the oldest in Africa and inspite of the devaluation of the Naira,the market is performing reasonably well,as well as it can under the prevailing circumstances.The Nigerian Stock Exchange (NSE) was established in 1960 through parliamentary act and as of March 9,2007,it has 283 listed companies with market capitalization of 15 trillion(125 billion Dollars),achieved with the outstanding effort of Akintola Williams.It has its headquarter in Lagos state with some of its branches in Abuja  and PortHarcourt.Perhaps,the functions of the Stock Exchange Market is geared towards providing employment opportunities to the investors,promoting public participation by providing investment opportunities to the individuals with small capitals.In that,the investors can buy shares of firms,thereby allowing them to sell or transfer the shares to those who wish to buy them.They also protect investors from fraudulent practises and dealings in quoted securities and ensure fair trading through its rules andd regulations.They also advise the government,industrialists and other investors that deal in securities.With these small outlined functions,it is a well established fact that the tremendous functions which the Stock Exchange Market performs,cannot be over-emphasized.
    Furthermore,the insurance company performs a wide variety of functions,regarding the definition of insurance as a contract between the insurer and the insured(Client) to compensate or indemnify the insured on the occurrence of loss or risk insured against paying insurance premium.In other words,they enable people to pool risk and enterprise against occurrence of future loss,like fire ,burglary,accident,marine,motor vehicle risks.They also stimulate and facilitate external trade because,marine policy,for examply provides cover for cargoes and vessels.They give out loans to businessmen which helps in developing our economy.They help in controlling loss or liabilities of a business man by spreading the financial loss of the insured.Also,workers who are insured are thus,guaranted secured future,hence they keep working harder,resulting to high productivity.Even the old age and disabled are protected through life assurance.Reinsurance corporation of Nigeria,National Insurance Corporation of Nigeria(NICON) ,are active part of these companies.
     Nevertheless,the Mortgage Bank also known as the building society play important role in economic development.They grant loans to individuals and corporate bodies for building purposes.Hence,they encouraging people to own a house.One of its kind,the Federal Mortgage Bank of Nigeria (FMBN),has its headquarter in Lagos,aimed at encouraging people to save in order to build.This building society give state developers loan to keep on building to supervise and encourage the development of Mortgage institutions ,advise and assist the Government on housing matters and provide and construct houses for individual and Governmnet.
    In conclusion,we can see that the general functions of the Capital Market Operators include;provision of loans for capital projects,mobilization of savings,growth of merchant banks and most importantly,help in revamping the economy.