Tuesday, July 27, 2021

How To Invest In The Nigeria Stock Exchange Market

The Nigeria Stock Exchange, or NSE, is one of the largest stock markets in Africa.  Featuring top companies from every conceivable industry in Nigeria, the NSE is home to the many traders who perform the actual transactions that allow investors to buy and sell shares of stock.

Over billions of naira pass through the NSE annually, and anyone who is looking to grow his income can invest in the exchange with a brokerage account and some market knowledge.

Investors should always seek financial advice for investment decision to maximise returns. As an investor, investing in financial market is not gamble or betting, you need financial adviser for investment decisions. You should invest money you don’t have need for immediate use, invest for medium and long-term, also invest in stocks that have good fundamentals for capital gains.

What is a Stock Exchange?

A stock exchange is an organized and regulated financial market where securities (bonds, notes, shares) are bought and sold at prices governed by the forces of demand and supply.

Stock exchanges basically serve as primary markets where corporations, governments, municipalities, and other incorporated bodies can raise capital by channeling savings of the investors into productive ventures; and secondary markets where investors can sell their securities to other investors for cash, thus reducing the risk of investment and maintaining liquidity in the system.

How to invest in the Nigerian Stock Exchange?

Buying stock on the Nigerian Stock Exchange (NSE) is not the same as most of the other purchases you make. You can’t simply walk onto the floor of the NSE and fill a shopping cart as you do at the grocery store.

Instead, you must hire a brokerage firm (e.g. ARM Securities, Lead Capital, Meristem  and Zenith Securities) to buy the stock on your behalf. Different brokers offer different levels of support and advice to their clients, so it’s important to choose the proper level of support for your needs. Once you’ve hired a broker, you will ask him to buy and sell stock for you whenever you wish to make a transaction.

Below is a step-by-step guide of the basic steps to follow to start investing in the Nigerian Stock Exchange.

1. Find a stockbroker to open a brokerage account.

2. Complete the Central Securities Clearing Systems (CSCS) account opening form.

3. Fund your stock brokerage account.

4. Submit your first trade order once you decide what you want.

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