ABSTRACT

 This study examined the effects of the Central Securities Clearing System on the Nigerian Capital market for the period between 1980 and 2018. The main objective was to investigate how the variables of Central Securities Clearing System on the Nigerian Capital market has influenced the capital market. The analytical techniques employed in the study include Unit Root, Cointegration Test, and Vector Error Correction Model. The variables used in the study include Central Securities Clearing System (CSCS),Volume of Share Traded(VOST), Value of Share Trade(VAST) and Number ofListed Securities(NLIST), as the explanatory variables while Market Capitalization (MCAP) was employed as the dependent variable. The Data on these variables were sourced from the Central Bank of Nigeria (CBN) statistical bulletin volume 29, 2018. The unit root result revealed that none ofthe variables was stationary at level, but at first difference, the variable became stationary which necessitated the need for Johansen cointegration test. The Johansen Cointegration test revealed that there is a long run relationship between Central Securities Clearing System and the Nigerian Capital market. The result of the VECM showed that all the explanatory variables such as Central Securities Clearing System and Volume of Share Traded, had a negative coefficients while Value of Share Trade (VAST) and Number of Listed Securities(NLIST) had a positive coefficients, while the F-statistics for joint influence showed that the explanatory variables had joint influence on the dependent variable as the probability value was less than 5% level of significance.R2is0.60, which shows that the model explains about 60%ofthe total variations in MC AP are explained by the independent variables during the period ofthe study. Based on these findings the research recommends among others that; the Nigerian capital market has a bright prospect given the recent policy direction especially the abrogation of all laws that hitherto hamper its effective and efficient functioning, Also, the improvement in the trade facilities in the market in line with what is obtained in the developed market. More so, for a significant growth, the focus of the policy of government should be on measures to promote growth in the capital market and it is pertinent to recommend that there should be sustained effort to stimulate productivity in both the public and private sectors.