Do you want to invest in stocks? Have you being looking around on the internet on how to buy shares in Nigeria? Then you are at the right page.
To start with, working capital is needed to be able to purchase shares.
As licensed by the Nigerian Stock Exchange (NSE), it is the responsibility of Stock Brokers to buy shares and handle all necessary transactions for you. But before you chose a broker, you need to decide on the type of shares you want to buy. You can either buy shares directly from a company, when the advert is placed for public consumption or from the open stock market.
Whatever method you choose, as said earlier, it is the responsibility of the stock broker to manage all transactions pertaining to your shares.
Please note that the stock broker(s) will charge a certain fee plus commission to handle the trading of your shares. Although, the fees are often calculated using a standard sliding scale. This method of calculating stock brokers commission is the same across all brokers.
Below is a step by step guide on how to buy shares in Nigeria.
Step 1: Open a Nigerian Brokerage Trading Account
As directed by the Central Securities Clearing System (CSCS), you would have to open an electronic account. To open this account, you would be provided with the CSCS account opening form by your broker. You will also be given a CSCS account number. The purpose of this account number that would be on every stock or shares you trade is to track the record of all your holdings by the CSCS
Some documents as required to fill by the CSCS form include:
- A valid form of identification- This can be any government issued ID with a number on it, international passport, Driver’s License or National ID card for this purpose.
- Two colored recent passport photographs of yourself.
- To verify your physical address, you provide a photocopy of a recent utility bill, water or electricity bill.
- When you have finished filling the CSCS form you will be required to submit the form along with the account opening form, your passport photograph, copy of an ID and a copy of your recent utility bill to your stock broker. It is advisable to use a registered mail service when sending such as they are more reliable than the traditional postal service.
Step 2: Fund Your Brokerage Account
You would have to fund the brokerage or trading account after you have opened the account. It is the responsibility of your broker to give you the details of the account you are to fund. You can use wire transfer method because it is more efficient
Step 3: Submit a Trade Offer
Before you decide on which shares to buy, you should carry out a thorough research. Meet your broker for more advise before setting out terms and conditions to your broker. Since the shares on the Nigerian Stock market are liquid, try and set a price limit for any share you wish to purchase, so that you don’t end up paying more than what you want.
Finally, your broker will send you a contract note that contains the details on the shares bought, the sell price, the commission as well as the necessary fees charged.