Impact of Equity Issuance Digitalization on Capital Market Development in Nigeria

Abstract

The paper seeks to understand the impact that automation of equity issuance has on the overall development of the capital market in Nigeria. In December 2021, The Nigerian Exchange Limited evolved an automation process for issuing shares. For the first time in the Nigeria Exchange's history, an offer for sale was made using a digital platform called ‘Primary offer’. The offer of MTN Nigeria Communications Plc was the pivot for these feet. This achievement was part of a longterm plan for digitalising the capital market. The major objective of the study was to determine if the automation impacted the prize of MTN shares in the capital market and, by extension, whether this impact affected the capital market development in any significant way. Data was assembled pre and post subscription, and Ordinary least square (linear regression) was used to regress the data. The study’s major limitation was the availability of sufficient data to act as proxies to manage the variables identified. While the result revealed an increase in the prize of shares subscribed and traded in the exchange following the automation, no significant effect on the prize was detected, making us conclude that digital automation, though an effective tool in improving the efficiency of the market but may not have impacted on the All-share index. The study therefore recommends more players needs to be encouraged to participate in the exchange in other to achieve the desired depth for the market and, by extension, develop the capital market