For the economy of any modern state to function very well it is imperative that such state pay special attention to it’s financial market. This is so because, the financial market is the center where the state draw its source of revenue and use it for the development of other sectors, the financial market is made up of the sub-sector such as the money market, capital market as well as other sub-market.

The mechanism through which short term funds and other financial tools which spentless than one year are transacted in the capital market, i.e. money market and capital market can be felt in the amount of instrument bought and sold in each of these market. According to Onyido (1994:20) the money market primly exists as market of liquidity adjustment while the capital market provides the leverage through which saving of surplus transform into medium and long-term investment as well as deficit units.

The stock market is a conglomerate of other financial institution that interact to mobilize and allocate long-term funds in the economy this is true because the market encourage both business firms and government sector.

The stock market is a necessity for maintaining the competitiveness, today’s economy gives the increasing international competition spurred by rapid technological progress and increased role of immolation specifically, the major function of the stock market is to provide medium and long-term financing for public companies and government in a way that shields them from the risk of short-term volatility of economic outcomes. Through its institutional and legal framework, the stock market promotes transparency and good corporate governance by encouraging higher accounting auditing and reporting standards, provides the market with information the public requires for investment decision and thus enhance market efficiency. Moreover, the long chains of facilitate and intermediates in the stock market help to deepen the financial market and make it move innovative and competitive. The stock market through its primary mechanism provides some idea of the current cost of capital which determines the level of new investments. It also facilitates the entry of domestic enterprise into international stock market and via versa.

The provision of products and submarkets in the stock market makes a major contribution to promote efficiency of the financial market in managing risk and also reallocating risk which increases market stability. The existence of stock market since its inception served as a veritable source of long-term funds to financial investment some of the reason for promoting an active stock market in Nigeria include mobilization of saving for economic growth and development, encouragement of efficient allocation of resources through changes in wealth ownership and composition creation of a health private sector, and promotion of rapid capital formation.

However, investment in the macroeconomic level is categorized into public and private sector. Investment expenditure, formation of foreign investment (indirect investment) irrespective of who his financing the source of capital be it finance by private or official sources of capital. Investment on the otherhand could also be evaluated from the sectoral distribution point of view, in this case, each group of activity sector of the Gross Domestic Product (GDP) is examined to undergo the actual measurement of the quantum of investment expenditure that is been receive over a particular point in time.

Nigeria economic structure was unattractive for foreign investment (both direct and indirect investment) hardly achieve a stable and effective economic climate thereby giving a precarious operating atmosphere which also limited domestic investment as was outline earlier, in spite of vast investment opportunities in agriculture industry, oil and gas, commerce and infrastructure, and portfolio management to mention a few, very little foreign investment capital was attracted when compared with other countries who have achieved in the region of global investment capital.

Nigeria economic climate was notable to attract foreign investment (both direct and indirect investment) to it fullest potentials, given the precarious operating environment also limited domestic investment, owning to the unattractiveness of the Nigeria investment climate which was characterized by high transaction cost, inadequate high rate of crime, salary imbalance, limited foreign resources came into Nigeria others in for foreign direct or portfolio investment or thorough official sources such as aid-in-grant.

What is responsible for this trend? Are the no policies and strategies to aid the inflow of foreign indirect investment? Could it be that the problems are inherent in the designing of these policies and strategies, or perhaps still, is the investment climate of Nigeria not conducive enough?

This brings our focus and concerns pointing out the real fact that such inflow which have gone a long way, there by bringing improvement of the nations economy, and extensively improve the standard of living among members of the country.

1 To determine the pattern of foreign indirect investment inflow in Nigeria between 1997 to 2006.
2 To ascertain the relationship that exists between the inflows, outflows and netflows of foreign indirect investment and the market capitalization of the Nigeria stock exchange market.
3 To establish the relationship that exists between the inflows, outflows and netflows of foreign indirect investment and number of institutions in the Nigeria stock market.
4 To make recommendations on the proper management of foreign indirect securities in the market.

Foreign indirect investment is very important component of foreign capital flow and the benefits that accompany it cannot be overemphasized. This benefit is underscored by the fact that all countries, especially developing countries have had to put in places and strategies to attract foreign investment. Over the years, Nigeria have over the years promulgate decrees seen as unfriendly to foreign investors and other legislature persuaded as unfavourable to the inflow of foreign investment. This study is hoped to be of immense benefit to the federal ministry of finance, the Central Bank of Nigeria (CBN) and other policy makers of the country. It is further hoped that these study will contribute to the existing body of knowledge in foreign investment flow and trend in Nigeria, finally, it is also important that these study will serve as a reference material for interested research on similar subject.

1) Does foreign indirect investment affect the growth of the Nigerian stock exchange market?
2) Does foreign indirect investment affect market capitalization at the stock exchange flow?
3) Is there any increment in the volume of societies trading in the Nigerian stock exchange market due to foreign indirect investment?
4) To what extent has the foreign indirect investment promotes the stock market activities and the economic states as a whole.

Ho: There is no significant relationship between cumulative foreign indirect investment, Nigerian stock exchange capitalization and value of listed securities.
Hi: There is a significant relationship between cumulative foreign indirect investment, Nigeria stock exchange capitalization and value of listed securities.
Ho: There is no relationship between cumulative foreign indirect investments, numbers of listed institution and the value of listed securities.
Hi: There is a relationship between cumulative foreign indirect investment, numbers of listed institution and the value of listed securities.

The scope of the study was restricted to the activities of stock markets in Nigeria from 1997 to 2006. Additionally, it will focus on foreign indirect investment and the growth of Nigerian stock market.
The study was further limited by financial constraint realty from the limited resources of the researcher, time constraints due to the brief time frame used in conducting the study as well as inaccurate records painting to the activities of the Nigeria stock market.

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