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How To Buy Shares In Nigeria

how to Buy shares in nigeria

 The practice of trading stocks has grown in popularity over the past ten years, and millennial engagement in the stock market has increased noticeably. This increase is related to well-liked mobile trading apps, which have boosted trading numbers.

With increased internet service provider coverage and an increase in brokers who allow traders from African nations, Nigeria has also seen growing interest in online trading from both millennials and more experienced stock traders.

WHAT ARE SHARES?

Shares reflect a particular proportion of ownership in the business or corporation whose shares you buy. Depending on the sort of shares you possess, owning shares entitles you access assets and earnings as well as a portion of the firm.

The term "outstanding shares" refers to all securities held by third parties. Consider Company ABC, where there are 500,000 shares in circulation and you possess 50,000 of them. This indicates that you hold a 10% investment in Company ABC.

Companies can be privately held or publicly traded. This indicates that a small number of people, who are either founders, managers, or private investors, own private enterprises.

Public corporations are ones in which shareholders other than the owners, founders, or board of directors of the company may own stock.

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THE NIGERIAN EXCHANGE GROUP (NGX)

The first thing to keep in mind is that a stock market represents the businesses that have listed equity shares that the general public can buy and/or sell. The trading of these equities, stocks, or shares is made possible through stock exchanges.

Companies wouldn't have a formal way to list shares if there were no stock exchanges. Stock exchanges wouldn't be necessary if there was no stock market. 

The NGX, formerly known as the Lagos Stock Exchange, was founded in 1960 and supports Nigeria, the continent's largest economy. Both Nigerian and foreign businesses can access capital through the Nigerian Exchange Group.

As a result, they can take advantage of the capital market to finance the strategic growth and expansion of their business. The Securities and Exchange Commission of Nigeria effectively regulates the NGX.

All listings are included on the All-Share Index of NGX, which was formed in 1984 and has a base value of 100, and it is licensed under the Investments and Securities Act.

Despite the fact that there are various share classes, only common or ordinary shares were taken into account while calculating the index. Being a founding member of both the World Economic Forum and the African Securities Exchange Commission is another significant characteristic of the NGX.

How Does Stock Trading Works?

In stock trading, shares are purchased and sold on a stock exchange in the hope that they will increase in value. A share investment is the long-term purchase and holding of shares.

The most popular method of trading stocks involves traders who purchase shares at a discount and then sell them at a premium, frequently on the same day. These traders, known as day traders, rely on minute fluctuations in stock prices to generate modest profits that compound over a number of instruments.

The secondary market, or stock exchanges, is where all publicly traded company shares are listed. Exchanges function to connect vendors on the exchange with possible buyers.

As a result, if you wish to purchase any shares of a corporation, you must do so from other market participants who are selling their shares on the stock exchange.

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How To Buy Shares In Nigeria

You cannot compare buying shares on the Nigerian Exchange Group with any other transactions you make. You cannot just stroll onto the floor of the NGX and put shares in a cart like you would when you went grocery shopping.

You need a stockbroker who will handle your trade on your behalf if you want to purchase shares that are listed on the Nigerian Exchange Group. Different brokers provide their clients with varying price structures, support, and financial advice. 

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Stock Trading Platforms 

eToro: 68% of retail CFD accounts lose money

Pepperstone: Award-Winning Broker

Admiral Markets: Great Educational Centre

IG: UK's No.1 Stock Provider

Plus500: Easy-to-Use Platform

These trading platforms are excellent for new traders wishing to start investing or who are simply inquisitive. Each of these brokers is completely regulated, ensuring a secure and safe trading environment, and they also come with everything you need to be successful. This offers a large selection of equities to pick from and instructional tools to support your initial trade-making.

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What you will need to register with a broker

You must set up an account with your preferred brokerage in order to begin trading shares on the NGX. The Clearing House Number (CHN), which is exclusive to each investor's and trader's portfolio, will subsequently be given to you.

Using your special number, you can deposit money after receiving your CHN so that it can be credited to your trading account. You can transact through your broker using their online trading interface after the money appear in your account. 

By enabling the trade on the back end, your stockbroker enables you to purchase and sell stocks on your own.

A Central Securities Clearing System (CSCS) account is another essential requirement when buying shares in Nigeria. The market aggregator in Nigeria, known as the CSCS, stores every account opened and kept up to date by Nigerian stockbrokers.

You can view and manage your portfolio separately if you have a CSCS account. This is the best approach to manage your portfolio and normally costs between N2K and N5K annually.

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FAQS

Do you pay taxes when you buy and sell shares in Nigeria?

No, there are no capital gains taxes when you buy and sell shares in Nigeria.

How long does it take to clear funds when you trade shares in Nigeria?

When you buy or sell shares in Nigeria, it can take up to 4 days for the entire transaction to be completed.

How long does it take to process withdrawals when you buy shares in Nigeria?

This depends on the withdrawal deposit that you use. Some withdrawals can be processed within 24 hours after the request was submitted.

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