Nigeria Stock Exchange: How To Trade Shares, Invest in the Nigerian Market
Nigeria is a major player in the global economy and there has been a significant increase in business activities with international investors. This blog post will discuss how to trade shares, invest in the Nigerian market, and what you need to know before investing.
The Nigerian Stock Exchange (NSE) offers trading of equities, bonds, mutual funds and exchange traded funds (ETFs). The NSE was founded on April 17th 1990 as an autonomous organization under the Securities & Exchange Act 1988 to promote investment into Nigeria by both local and International Investors. The NSE trades securities electronically 24 hours a day from Monday through Friday with no holidays observed. Trading takes place via the computerized system known as CREST which operates under continuous surveillance against attempted fraud
Section 1: What you need to know before investing in the Nigerian Market
There are five fundamental characteristics of the Nigerian market that you need to know about before investing into the Nigerian Stock market. These five characteristics are the following:
Securities are regulated by the NSE. These securities can be listed on the NSE. This covers stocks, bonds, ETFs, Certificates of Deposits and what some other names are. The reason for the exclusivity of the NSE for listing these products is due to regulations such as Minimum Capital and a number of other guidelines. Exchange-traded funds (ETFs) cannot be listed on the Nigerian Stock exchange due to the requirement that investors hold these instruments for the long term. You can trade ETFs via other financial exchange such as BSE or LSE.
How to Trade Shares on the Nigerian Stock Exchange
All you need is a system that will allow you to trade in equities. Traders on the Nigerian Stock Exchange trade through trading platforms such as the DRT Trading system which requires you to submit an application and pay N5,000 as application fee to trade. The next and last step is for you to submit your shareholding details.
The NSE also provides exchange traded funds (ETFs) which you can trade on the NSE. The ETF trades on a platform that also operates under continuous surveillance against attempted fraud and can only be traded if you have the possession of a valid share certificate. The application for trading in ETFs is located on the same CREST platform that all shares trade on.
How to Invest in Nigeria
As mentioned, The NSE operates 24 hours a day, 7 days a week. If you live in Nigeria, you can trade through the NSE website at www.thense.com.ng. There are specific NSE app and mobile websites for convenience.
There are two investment options for investing in the stock market in Nigeria: shares and ETFs. Each share of the NSE represents 100 shares of the organization. You can also buy and sell shares at any point during the day and on any market day. Each market day a new set of prices for these securities is published and prices are recorded. There are 24 market days a month and the NSE maintains a daily open and close. After markets close, the results of the trading day are posted online to help users monitor what happened to their investments.
Nigeria is a big player in Africa with a major economy. It is time to start investing with the Nigerian Stock Exchange and learn about the most popular stocks that can be traded on NSE.