Home Featured Business How To Invest In The Nigerian Stock Exchange Market.

How To Invest In The Nigerian Stock Exchange Market.

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Nigerian Stock Exchange.

The Nigerian Stock Exchange (NSE) is one of the largest stock markets in Africa which operates a fair, orderly and transparent market that brings​ together the best of African enterprises and investors from around the global. 

The exchange involves top companies from every industry in the country and every company has shares which the owners lay claim to. Traders can therefore, perform transactions that allow investors to buy and sell shares of stock.

As the world economic is hit by the pandemic stock exchange becomes a bit hard, investments have been very uncertain, and no one is sure what would yield good returns, however, as the economy revives so does the stock, hence now is the best time to invest in the Nigeria stock exchange business.

Today, it is now possible in real-time, to buy, sell and monitor your investments on the Exchange from the comfort of your home, offices, just anywhere using your phone.

What is a Stock Exchange?

A stock exchange is a marketplace where securities, such as stocks and bonds, are bought and sold. A stock exchange standardizes investment allows people to buy or sell discrete and equal shares of ownership in various companies. It facilitates the transfer of funds between investors and businesses, regulating as necessary to provide maximum safety for everyone’s investments.

The Nigerian Stock Exchange (NSE).

The Nigerian Stock Exchange (NSE) founded in 1960 as the Lagos Stock Exchange, services the largest economy in Africa. This Stock Exchange offers a range of tradable securities to meet the risk profiles of our diverse investors. As a registered company limited by guarantee, the NSE is regulated by the Securities and Exchange Commission of Nigeria and licensed under the Investments and Securities Act

All listed companies on the NSE are included in the NSE All-Share Index (launched in 1984 with a base value of 100) – the benchmark index for the Nigerian stock market. Stock prices and indices are published daily by the NSE on the Nigerian Stock Exchange Price List.

To invest in our market, investors can acquire securities directly from the primary market when there are new offerings by issuers or by trading in existing listed securities via our secondary market platform. ​The NSE continues to evolve in order to meet the needs of its valued customers and to achieve the highest level of competitiveness.  It is an open, professional and vibrant exchange, connecting Nigeria, Africa and the world.

How to Start Investing In The Nigerian Stock Exchange.

There are three main process you need t follow to start investing in the Nigerian stock exchange, these includes;

Get a securities dealer/stockbroker

A stockbroker is a professional who executes buy and sell orders for stocks and other securities on behalf of clients. A stockbroker may also be known as a registered representative, investment adviser or simply, broker. The stock Brokerage firm or your stock brokers acts as the intermediaries between you and the stock market.

According to NSE, to purchase securities in the primary or secondary market, an investor must appoint a securities dealer/stockbroker who is a registered Dealing Member of NSE to facilitate account opening and trading.

The central securities clearing System Plc. (CSCS) a licensed Central Depository, Clearing and Settlement of transactions in the Nigerian capital market can only be opened by a stock broker. Even when buying from the primary market, a stock broker is required, hence the importance of getting one.

How to Select a Stockbroker

Firstly, you need to analyze your personal investing style, and then you can proceed to finding the kind of broker that fits your needs. Furthermore, in selecting a suitable broker to represent your interests as an investor, you should confirm the broker’s status with both the NSE and SEC, advised by NSE.

The NSE also recommends investors meet with the broker-dealer firm to determine whether the services they offer match their specific needs. Stockbrokers and custodians have a fiduciary responsibility to their clients which implies management and safekeeping.​​ 

Open Investor’s Account

An investment account is a monetary account, which you can use for such transactions with financial assets, the taxation of income earned on which (interest, sales proceeds, insurance benefit, etc), you would like to postpone. The investment account also refers to as the brokerage account is a taxable account used to buy stocks, bonds, mutual funds and other investments. It is normally opened for you along with a CSCS account with which your stocks would be moved in. 

To open a trading accounts, investors will need to submit to their dealers, documents that meet the regulatory Know-Your-Client (KYC) requirements, an ordinary person or company might not understand this requirement therefore you need to contact your dealer/stockbroker for guidance.

Fund your Account and Start Trading

This is where the real risk starts. New investors often have two questions in this step of the process:

How much money do I need to start investing in stocks? The amount of money you need to buy an individual stock depends on how expensive the shares are and how much you are willing to risk. However, know that the best thing to do after you start investing in stocks may be the hardest.

 You can make quick money from speculation quicker than you’d ever imagine. It is possible to get a stock worth of N100,000 some stock unit and quickly make gain by selling it within the next few weeks or months.

However, it is also possible to buy some unit for N200,000 and watch your money deplete into half within the next few weeks. So, this is a lose or gain approach. But if you are well informed about the ins and outs of investing in the stock market and the Nigerian stock exchange, it is possible to avoid the risks and make quick cash.

Above all, risk is necessary in trading but knowing when to say no is an essential aspect of the art of picking stocks.


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