ABSTRACT 

In any model of economic development, capital occupies a position of crucial

and strategic importance. Economic development of any sort will not be

possible unless there is adequate degree of capital formation in the country.

However, a very important trait of underdeveloped economy is deficiency of

capital, which is due to small saving by communities.

Underdeveloped economics hardly saved 5% of the national income, whereas

they should save and invest at least 12% in order to secure a reasonable level of

development (Dewett, 2002).

The Capital market in any country is one of the major pillars of long-term

economic growth and development. The market serves a broad range of

clientele, including different levels of government, corporate bodies and

individuals within and outside the country. Capital formation entails

accumulated savings out of the current incomes of either organization or

individual. It is investment in fixed assets which in part is financed with monies

raised through the capital market (Al-Faki, 2006). The Capital market has been

one of the major means through which foreign funds are injected into most

economies and the teidericy towards a global economy is more visible there

than anywhere else. It is therefore, quite valid to state that the growth of the

capital market has become one of the barometers for measuring the overall

economic growth of a nation (Emenuga, 1998).