How To Invest & Buy Shares In Nigeria
Ever taught about buying and investing in stocks?
Have you heard people talking about making millions out of stocks ,but you don't know anything about stocks but would want to invest?
If your curious about investment in stocks and buying shares,this article will show you how you can invest and buy shares in Nigeria.
You must however, have a working capital to be able to purchase shares.
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Buying of shares is one of the functions of Stock Brokers as they have been licensed by the Nigerian Stock Exchange (NSE) to do so. ---
A Short term trading in the Nigerian stock exchange is actually what a lot of people go for,this involves making intelligence speculations and buying shares that are expected to rise within weeks,after the shares has risen,you will sell your shares and make your profit.
How To Invest & Buy Shares In Nigeria
Investing in shares is not a get rich quick scheme,you actually need to have a little knowledge about shares or else you will lose your capital,first of all lets take a look at how you can invest and buy shares in Nigeria.
1. Hire A Stock Broker
To start off in this gig,you will definitely be needing the services of a stock broker or a brokerage firm.
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The Brokerage firm or your stock broker will acts as the intermediary between you and the stock market,the firm or stock broker will also handle the complicated part of the transactions,they usually earn commissions for their efforts.----
2. Open A Brokerage Trading Account
A Brokerage Trading Account is an electronic account which you must open as instructed by the Central Securities Clearing System (CSCS).
In other to open this account you will be needing the services of a broker who will help you to open the account after which you will be assigned a CSCS account number.
This account number will be on every stock or shares which you trade,also the CSCS will be able to have a record of all your holdings.
Your CSCS account will make it possible for you to buy stocks,you might still not be able to buy stocks on your own but you can go through your stock brokering firm or your broker.
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Documents required to open the CSCS account include:---
- A valid form of Government identification ie international passport, Driver’s License or National ID card.
- Two colored recent passport photographs.
- A photocopy of a recent utility bill (For verification of address).
Read Also: NSE Websites For Daily Price List Update
3. Investor' s Account
An investors account is usually opened alongside the CSCS account.
An investor's account is an account that is tied to your name as an investor.
This account is for equity and bonds.
An Investor's account is usually opened by the brokerage firm or broker. All the transactions done on your behalf by your broker will be recorded in your name in your investor's account.
Read Also: Nigerian Stock Exchange Quick Facts
4. Funding Your Account
After opening your account you will be briefed on how you can fund your account,usually your account will be funded via wire transfer.
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5. Submitting A Trade Offer---
This is the deal breaker that will determine if you will be successful or not,before deciding on which shares to buy,it's imperative that you inform your broker on the number of shares you want to buy.
If you intend to buy from the primary market (usually the one that companies advertise on TV)or from the the secondary market,your stock broker will buy it for you,once this is completed,your broker will send you a contract note containing the details of the shares bought,details such as the share price, the commission of the broker as well as the fees charged.
Your brokers commission fee is calculated using a standardized sliding scale and is usually the same across all brokers.
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