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.
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.
One of the major responsibilities of a stock exchange is to impose stringent rules, listing requirements, and statutory requirements that are binding on all listed and trading parties.
The Nigerian Stock Exchange (NSE).
The Nigerian Stock Exchange (NSE), founded in 1960 as the Lagos Stock Exchange, services the largest economy in Africa. It provides access to capital for Nigerian and international companies that take advantage of the capital market to fund their strategic business expansion.
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 listings are included in the NSE All-Share Index, which was formulated in January 1984 with a base value of 100. Only ordinary shares are included in the computation of this index.
The NSE is a founding member of the African Securities Exchanges Association and also a foundation member of the World Economic Forum. The Nigerian Stock Exchange currently has over 160 listed companies including the like of Zenith Bank, Unilever, UAC Foods, Oando and Julius Berger in its portfolio.
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.
Buying and owning stock is an exhilarating experience when the stock price climbs and you see your investment making money. But sometimes stock loses value, and this isn’t nearly as much fun to watch.
It is crucial to understand that you can lose money in the stock market. As a result, it is best to diversify your portfolio. This means buying stock in several companies and industries rather than putting all of your eggs in one basket. It’s also important to thoroughly research a stock before buying it.
This guest post article was submitted by Nairabarter.com (Daily Exchange Rates From Dollar, Euro, And Pounds to Nigeria Naira).