It doesn’t matter if you are a major investor or you just base on a small one, several investment options remain accessible in Nigeria, with Nigeria stocks being one of the viable options. Stocks signify ownership in publicly traded companies. When you get your hands on stocks, it is essentially acquiring a stake in that company and becoming a shareholder.
Nigerian stocks are traded on stock exchanges such as the Nigerian Exchange (NGX) and NASD OTC securities Exchange, where investors get to engage in buying and selling. The price of a stock is determined by various factors which include the company’s performance, market conditions, supply and demand dynamics, economic trends, and investor sentiment.
Investing in stocks would get you the potential for capital appreciation as the value of the shares would increase with time. However, also it involves risks as the stock prices can get volatile and can be influenced by several external factors beyond the control of the company.
The Nigerian Exchange in 2023 appreciated by 45.9%, as stocks offered some of the best investment returns in the country last year. Some of the equities that traded in the market appreciated by as much as over 1000%, 700%, 400%, and 200%, while some of them recorded no capital gain throughout the whole year.
Just like other capital markets across the world, the NGX offers no challenge. The market is more open to institutional investors, leaving out regular Nigerians who are more prone to picking an unsafe and riskier investment option
How to Invest in Nigerian Stocks in 2024
Open a Brokerage Account
The very first step in investing in the NGX is opening a brokerage account with one of the approved stock broking firms in the country. At the moment, there are over around 100 active stock broking firms, with the most popular being CardinalStone Securities, Meristem Stockbrokers, Afrinvest Securities, CSL Stockbrokers, Stanbic IBTC Stockbrokers, Calyx Securities, and FBNQUest, among others. To get this done, you would have to fill out an application and offer certain documents which include:
- Your Means of Identification (Drivers’ license)
- Bank account details (including your BVN)
- Your passport photos, signatures (if this is a personal account), and next of kin information. This process usually takes less than 48 hours, especially if you already have a bank account.
To make this step a lot easier, you can make use of an online trading platform. Some of the registered stockbrokers in Nigeria carry trading apps that allow for easy access to the stock market.
Some trading apps include FBN Edge by FBNQuest, MeriTrade by Meristem, and Stanbic IBTC Stockbroking, among others.
After Opening an Account
Once your account has been set up, you will get a unique clearing House Number (CHN) for your investments. In other to start trading, you would need to deposit money with your stockbroker and ask them to purchase shares for you.
Also, they will usually communicate with you right through your registered email. But making use of their online platform is easier – also it enables you to handle purchasing and selling stocks by yourself. With these online portals, you also can make bids or offers, and they are usually sorted out within seconds. Also, your broker would email you when you place bids or offers, and once the transactions are done.
Register with CSCS
The Central Securities Clearing System Plc (CSCS) serves as the authorized entity responsible for central depository services, clearing, and settlement of transactions within the Nigerian capital market.
For individual investors looking forward to engaging in Trading Nigerian stocks, it’s advisable to register with CSCS, however, it isn’t necessary. Consider CSCS as a major storage facility for all the accounts that are being handled by stockbrokers in Nigeria. Having an account with CSCS offers you a personalized window to monitor your investments.
It is akin to having an individual perspective on the stocks you possess, distinct from the information presented by your stockbroker.
In other to withdraw funds from your online brokerage app, visit the website and select the withdrawal option. Certain brokers may request your email to transfer the money to your bank account. It is important you remember the funds that would be sent to the bank account as provided during this process.