Effect of automation of the trading system on performance of the Nigerian stock exchange

The research constitutes an empirical study involving historical data sourced from the NSE, which examines the upward trend in the performance of the NSE with the introduction of the ATS in 1999. The Independent T- test was specifically applied to assess the performance before computerisation (introduction of ATS in 1999) and performance after computerisation. The study covers a period of 15 years (from 1992 to 2006). The Capital market performance tools considered for this test include Capitalisation, Turnover by volume of Shares and Turnover by Value of Shares. The Independent T-test revealed that the performance in all the three aspects has significantly impacted on Capitalisation, Turnover by Volume and Turnover by Value of the Nigerian Stock Exchange with the introduction of the Automated Trading System. The SPSS statistical software was used to conduct a pre, and post automation analysis using the key capital market indicators, namely, the market capitalisation, Turnover by Value, Turnover by Volume, and Capitalisation. Findings revealed highly significant improvement in the performance of the three indicators with the introduction of the ATS in 1999. The study therefore recommended amongst others that Automated Trading should be enhanced and improved with the introduction of strategies for its efficiency, and that introduction of remote trading should be encouraged.