The Nigerian Stock Exchange, formerly the Lagos Stock Exchange, was introduced on September 15, 1960, and has since been a breeding ground for fearsome investors to thrive. Investors have been rewarded through dividends, bonus shares, and capital appreciation (a rise in equity price).
Becoming a potential investor in the Nigerian Stock Exchange (NSE) in 2024 is a pivotal step for those who aim for financial freedom. In this article, I’ll put you through the necessary steps to become involved in the Nigerian Stock Exchange market. Also, you’ll learn the pros and cons of being an investor in the Nigerian stock exchange market.
Interested? Let’s delve into the topic right away. However, let’s look at an overview of the Nigerian stock exchange market and how it operates.
What Is the Nigerian Stock Exchange?
The Nigerian Stock Exchange (NSE), now called the Nigerian Exchange Group, is the commission in charge of all Nigerian stock exchanges. It was founded in 1960 and has since become a household name as it has housed hundreds of equities over the past 64 years.As of January 14, 2024, the Exchange Group has a total of 155 listed companies on its platform (check here), with 8 domestic companies on the premium board, 132 companies on the mainboard, and 4 on the Alternative Securities Market (ASeM) board.
Operations at the Nigerian Stock Exchange officially began on August 25, 2024, with a total of 19 securities listed on the exchange. However, based on some reports, informal operations started in June 1961.
Based on a Wikipedia report, operations were first conducted inside the Central Bank building with four firms as market dealers: Inlaks, John Holt, C.T. Bowring, and ICON (Investment Company of Nigeria).
Since April 27, 1999, dealers at the Nigerian Stock Exchange have been operating on the Automated Trading System (ATS). In 2013, the NSE released its next-generation trading platform, X-Gen, to facilitate electronic trading for the retail and institutional segments.
In 2021, the demutualisation of the NSE was launched, which led to the establishment of the Nigerian Exchange Group (NGX Group) Plc and three divisions: Nigerian Exchange (NGX) Limited, NGX Regulation (NGX RegCo) Limited, and NGX Real Estate (NGX RelCo) Limited.
Tinuade Awe was appointed the CEO of "NGX RegCo Limited," while Temi Popoola was appointed the CEO of the Nigerian Exchange (NGX) Limited.
Trading on the exchange begins at 9.30 a.m. and closes at 2.30 p.m. every Monday - Friday. Market prices, such as the All-Share Index, NSE 30, and Sector Indices, are published daily in The Stock Exchange Daily Official List, The Nigerian Stock Exchange CAPNET (an intranet facility), and newspapers. Historical price and performance data are also posted on the NSE website.
The Nigerian Securities and Exchange Commission regulates the NSE. The NSE says its mission is to help businesses and investors have reliable access to capital and provide secure saving systems and structures for effective and efficient business operations.
How to Invest in the Nigerian Stock Exchange
Investing in the Nigerian Stock Exchange (NSE) has been very easy following technological advancements. Long before now, many investors preferred to use the classical paper-based methods to perform operations, but now they prefer electronic methods for registrations and onward trading on the exchange. However, both options are still readily available, even though many investors prefer using the electronic method. In this section, I'll show you four steps you can take to become an investor in the NSE without stress.1. Apply In-Depth Research and Choose a Reliable Stockbroker
A stockbroker is the only authorised agent that buys, executes, or sells instructions on an investor’s account. A broker-dealer company registered with the SEC, and a dealing member of the NSE is referred to as a stockbroker within the context of the Nigerian stock market.When you want to decide on a stockbroker, it's essential to look at these requirements:
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