Stock exchange - the market where equities and bond are traded, monetary worth of companies and governments are determined, and different kind of assets are displayed in their absence - is quite different from our layman understanding of the term market. Unlike the ordinary market a stock market is an international market that acts as barometer for measuring the health of a particular country economy. Stock market indexes like the New York Dow Jones, Japanese Nikkei, UK FTSE, and Nigerian all share index are the first sign economists and investors look unto when they want to measure the overall health of the world economy or that of any other country in the world. At the eve of the recent fears about US debts, following the down grading of its bonds, stock indexes every where around the world falls signaling investors fear about the US economy and the world economy in general. Stock exchanges have remained one of the few key transmitters of the globalization process. It functions as a meeting point between local entrepreneur firms and international capital cannot be marched by any other market. Likewise it ability to satisfy both sides to a transaction- the entrepreneur firm and the international investor- cannot be performed by any other market.
The Nigerian stock exchange is, therefore, one of two to three major windows that linked Nigeria with the globalization process; in this matter NSE is more relevant than both the Nigerian foreign exchange market and its commodities markets. Since the liberalization of the Nigerian economy that began in the 1980s, the NSE has moved from its notorious position as a local hub for mostly domestic companies and investors to its current position of being a regional hub of investments coming to the sub Saharan Africa. Around the period 2007/2008, the NSE was ranked among the fastest growing stock markets in the world, attracting international investors from as far as Canada and China. In it drive to meet some of the challenges forced by globalization the NSE began the computerization of the its trading systems beginning from the middle of the 1990s. This began with the introduction of the central security clearing system (CSCS) in 1997 that has so far help to cut the number of transaction days taken to execute a single deal, from twenty days in those days to the current three days. Automated trading system (ATS), creation of various internet frameworks, and technological linkage were among the many changes that were introduced during that period in order to go with demands of globalization.
But the challenges of globalisation far outstretch what we have mentioned above, as the NSE is in it present form it is yet to meet some of the most critical challenges brought by globalisation that other exchanges around the world are grappling with. The impacts of the last global economic crisis on the NSE was devastating. In fact, the exchange was one of the worst affected exchanges around the world. Despite the recent short-lived recovery, the NSE is yet to recover half of its pre-crisis level of transactions volume as measured by the all share index. Recently, the exchange was mired in leadership crisis that called it suppose corporate governance mechanisms into question. Many governance questions raised by the recent leadership crisis are yet to be answered by the new management put in place recently. The same way that the NSE required listed companies to abide by the most valued of world corporate governance mechanisms, NSE itself must follow those rules if it wants to remain a global force to be reckoned with. The fact that modern exchanges around the world are run as public private companies (and, because of that international investors not only look at the listed companies they are putting their capitals into but also the stock market where the companies are listed) should have served as a signal to the NSE's management to initiate more reforms.
One of the most noticeable changes in the management of stock exchanges around the world during the last one decade is the move toward mergers between major stock exchanges in the world. The process, though it has faced some set backs in the past, is one example of changes caused by globalisation. This is telling you that one of the major agents of globalisation (i.e. stock exchange) has to change itself to conform to the reality of the process. The biggest stock market in the world, the New York stock exchange, is noted around the world not only for the technology it deploys but it flexibility and simplicity in adopting to changes as they happens. In this case we cannot say the same thing of NSE. The NSE is operating under a cabal that doesn’t want to see any significant change to the way the market is operating, because of the fear of erosion of their staunchly held power. In a period when hurricane of financial crisis has forced bourses around the world to change their norm of operation, the NSE remain adamant. For example, the Asian financial crisis of 1997/98 is still in the minds of the Asian stock exchanges as one phenomenal factor that changed them to their present forms. As for the NSE, the last global financial crisis with it impacts on the exchange, should serve as a rallying point that will propel it to the next era of growth.