The stock market is a very ambiguous system and seem to be mastered by only a few. This is because they do not teach you in school, rather you have to be intentional about learning it. The Nigerian stock market operates like every other major stock market around the world which is easy to understand. In simple terms, it is a platform on which a company offers its shares for public purchase.
This article looks into the details of the Nigerian stock market and covers everything you should know.
What is the Nigerian stock market?
Many shares the thought and risk associated with investing in the Nigerian stock market. From stock crashing completely, to their value dropping beyond reasoning in a matter of split seconds, there are risks associated with the stock market in general.
The Nigerian stock exchange is a registered limited company by guarantee and licensed under the investment and securities Act (ISA). They established it in 1960 and serves the Nigerian economy. The Securities and Exchange Commission (SEC) of Nigeria regulates the conducts of the Nigerian stock exchange.
How does the Nigerian stock market work?
The Nigerian stock market or more accurately, the Nigerian Stock Exchange is a platform where trades occur. The ATS (automated trading system) runs trade in the stock market, which handles the purchase and sale of stocks and also estimate their prices based on certain parameters. They automate their sales totally, and software programs or tweaks cannot easily manipulate it.
The basic process of trading on the Nigerian Stock Market is when you see a stock that you are interested in, you purchase through a broker. Companies normally list shares they will trade on the market as a way to raise capital. The other option is to borrow, which is far less attractive.
Does Nigeria have a stock market?
Yes. Nigeria has a stock market and they call the Nigerian Stock Exchange (NSE), which we earlier spoke of. They found this stock exchange in 1961 and employs a completely transparent method of operation. This is to attract both local and foreign investors.
How can I buy shares from the Nigerian Stock Market?
You can only purchase shares through a registered and licensed stockbroker. Most brokers require you to open an account with their agency and have certain criteria that you must meet. A good example of this is the minimum opening balance of the account. Due to digitization, however, you can now easily purchase stocks through digital platforms (still brokers), that allows you access the market directly, and trade on it. This is gradually eliminating the need for physical broker agencies. Actually, many of them are simply going digital.
Find yourself a legitimate broker, and you can start trading on the market in less than a minute.
Who is the owner of Nigerian Sock Market?
The Nigerian stock market is not for one person. It is rather run with complete transparency and regulated by the Securities and Exchange Commission (SEC) of Nigeria. It is not a company, so to say, but rather a platform for companies.
The Nigerian stock exchange market is a platform that creates a win-win situation for all parties. Companies listed use it as a way to raise money from the public, while the public also makes money through dividend payout or selling off their stock after it appreciates. This helps create income for the two sides, therefore is a crucial tool for the Nigerian economy as a whole.
Currently, the Nigerian Stock Market is on its way to becoming the biggest in Africa, only behind the Johannesburg Stock Exchange (JSE) at the time of this writing.