The Stock Market is one of the unpopular markets in Nigeria. Most people in Nigeria don’t have indebt knowledge of how to invest and trade stock in Nigeria and this is because stock trade is not a common thing in Nigeria street.
A Stock Market is an aggregated market where buyers and sellers of shares meet to do an exchange. While shares are a unit of equity ownership in the capital stock of a company.
Many average Nigerians always think the stock market is for the privileged classes but they don’t know that anybody can invest in the stock market in Nigeria irrespective of their social class and financial status.
Before investing in the stock market you have to know that the stock market is a volatile market which means that the market is controlled by an invisible hand of demand and supply and as such you can a very good gains from your investment and in the same vein you can run loss of your investment. So you have to make up your mind before trying to invest in the stock market in Nigeria.
However, if you understand the risk involved in the stock market and wish to invest in the stock market in Nigeria, this blog will provide you with the guidelines and the stores to invest in the stock market in Nigeria.
How To Invest In Stock Market In Nigeria
To invest in stock in Nigeria simply means buying and holding shares in the stock market and waiting till the shares have some profit which you can then sell out and take your profit.
Investing in stocks in Nigeria can be profitable and at the same time, it can be disastrous when you make the wrong choice.
Nigerian stocks are traded on stock exchanges such as the Nigerian Exchange (NGX) and NASD OTC Securities Exchanges, where investors engage in buying and selling. The price of each of the stocks is controlled by many factors like the demand for the stock, the general performance of the company, the market condition, and trader sentiment all this adds up to influence the price of the stock.
To invest in stock in Nigeria, you will need the assistance of a stick broker before you can purchase a stock because it is not possible to go to the stock market and buy a stock directly.
So the steps to follow in investing in stocks in Nigeria are:
1. Choose Your Stock Broker
Stoke brokers serve as a middleman between you and the stock market. As an individual, you can only buy and trade stock through these stock brokers. So your first step in investing in stock is choosing your broker.
There are many stock brokers in Nigeria and you can get one physically or online. However, in choosing your stock brokers make sure the broker is registered and cleared by the Nigerian SEC.
2. Creating an Account With Your Broker
After you have decided on the stock broker you want to trade with, the next thing is going to create an account with the stockbroker. In creating an account, you will be required to submit documents like your National ID, Bank Verification Number, and other relevant documents to prove your identity.
After you have successfully created your account and it has been verified, you will get a Clearing House Number (CHN) for your investment which is a unique number that can only be used by you.
3. Funding your Broker Account
After you’ve created an account with your broker and have collected your CHN the next thing is funding your account. You can find your account with any amount you want to use to invest in the stock market.
Each of the brokers has their means of funding account but the general and common one is through deposit and funding with your ATM card.
4. Buying of Stock
After you have funded your account, the next is buying stock. Many stocks will be listed in your broker platform and all you have to do is research the stock you will buy. Make sure the stock you are investing your money in should be the one that has a history of good performance in the stock market.
So the above-mentioned steps are the step-by-step guide you follow to invest (buy) stock in Nigeria. Always remember that the stock market is volatile and you should be aware of the danger that is involved in trading stocks.
Conclusion
Investing in stocks in Nigeria involves buying stock and holding it till it has an appreciable profit. Buying of stock can be done through registered stock brokers in Nigeria. Investing in stock is a risky investment and you have to understand the intricacy of the stock exchange before venturing into the market.
