Such reforms include the financial, petroleum, power sector among others.
Along with banksthe financial sector also consists of insurance, REITscapital markets, consumer finance, financial services and mortgage finance. When the business cycle is on an upswing, the financial sector benefits from additional investments.
Improved economic conditions usually lead to more capital projects and increased personal investing. New projects require financing, which usually leads to a larger number of loans.
Why Invest in the Financial Sector?
Financial stocks are very popular investments to own within a portfolio. Most companies within the sector issue dividends and are judged on the overall strength of their financial health. In the financial crisis ofthe financial sector was one of the hardest hit with companies such as Lehman Brothers filing for bankruptcy.
After an influx of government regulation and restructuring, the financial sector is considerably stronger in Economists often tie the overall health of the economy with the health of the financial sector.
If financial companies are weak, this is a detriment to the average consumer.
Financial companies provide loans for businesses, mortgages to homeowners and insurance to consumers. If these activities are restricted, it stunts growth in both small business and real estate. This was caused by the financial crisis that produced catastrophic returns indown However, over the last five years, the sector has rebounded, giving investors an annual average return of Factors Affecting the Financial Sector Some of the positive factors that affect the financial sector include: Rising interest rates on a moderate basis: As rates rise, it means that these companies can earn more on the money they have and on credit they issue to their customers.
Whenever the government decides to cut back on the red tape, members of the financial sector will benefit, because that means it could lessen the burden while increasing profits.
Helping consumers with finances: As consumers decrease their debt loads, they lessen the risk of defaults.
This lighter load also means that they may have a tolerance for more debt, further increasing profitability.An Overview of Nigerian Venture Capital and Private Equity Essay - An Overview of Nigerian Venture Capital and Private Equity Executive Summary Nigeria is facing an uncertain future as outbreaks of ethnic and religious violence continue to place strains on Africa’s most populated country.
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This free Finance essay on Implementation of the IFRS in Nigeria is perfect for Finance students to use as an example. N % N % N % N % N % Successful adoption and implementation of IFRS would yield a positive impact on the various sector of the economy 22 40 6 2 0 0 3 K why not order your own custom.
The Nigerian financial system is made up of two sub sectors; the formal and the informal sub sectors. The formal sub sector comprises of the regulatory bodies, money market, capital market, foreign exchange markets, insurance companies, brokerage firms, deposit money banks (DMBs), development finance and other financial institutions.