Last Updated on January 2, 2023
Stock trading is becoming more popular, especially with the advent of the internet and mobile technology (apps). Anyone with a bank account can now participate in the stock market as most of the mystery and suspense surrounding it have been lifted. If you’re interested in how to buy shares in Nigeria, and you manage to become good at trading, then investing in stocks is indeed a profitable prospect for you.
When you buy shares in Nigeria, you’ve tapped into the potential to make your money grow and deliver superior inflation-adjusted returns with time. However, you need to buy the right shares.
You can buy shares in Nigeria both from the Nigerian stock exchange as well as stock exchanges in the US through a brokerage firm or an online investment platform in Nigeria. However, using a local or global brokerage firm can be sometimes complicated.
You’ll have to deal with issues like costs of opening an account, tax issues, payment problems due to currency conversions, technical support challenges and of course fraudulent brokerage firms.
That is why using apps to buy stock in Nigeria is a great option for you.
These online stock brokers in Nigeria allow you to buy shares in Nigeria in a legit, safe and secure manner. There are registered with the relevant government agencies like the Securities and Exchange commissions both in Nigeria and relevant foreign countries.
If you want to buy shares in Nigeria you need to be cautious of fraudulent brokerage firms that are not registered with the market regulator such as the Securities and Exchange Commission (SEC) in a foreign country like the US and even the SEC of Nigeria where you reside.
ON THIS PAGE
- What is Shares?
- About The Nigerian Exchange Group (NGX)
- How Does Stock Trading Work?
- Strategies to Buy Shares
- How to Buy Shares in Nigeria
- 3. Open a Trading Account
- 4. Choose the Right Share and Purchase
A Share or Shares is the percentage of stake in the ownership of a company or corporation whose shares you bought. When you own shares, you own a fraction of the company and be entitled to assets and earnings, depending on the type of shares you hold.
While there are three different types of shares mainly; the ones you can buy on the stock market are Equity shares. The other type of shares is Preference shares and Differential Voting Right (DVR) shares.
Equity shares aka ordinary shares make up the majority of shares issued by companies.
All the shares that external investors own are known as outstanding shares. For instance, The GTtech Company has 1,000,000 outstanding shares and you own 150,000 of those shares. This means that you own 15% of the stake in the GTtech Company.
Both public and private companies have shares (company shares), however, private companies are owned by a few individuals who are either founders, managers, or private investors, so the company is privately-held.
While Public companies are those in which people or the public can become a shareholder.
So when you buy any shares of a company, you are buying from other shareholders in the market who want to sell their shares through the stock exchange.
💡 “Stock” represents the holder’s part-ownership in one or several companies. Meanwhile, “Share” refers to a single unit of ownership in a company. For example, if Ben has invested in stocks, it could mean that Ben has a portfolio of shares across different companies.
While you can still use a personal stock broker to buy shares in Nigeria, there are now online stock trading apps you can use instead. The online stock brokers in Nigeria charge way lesser fees than personal brokers. This is why you need an explicit financial objective when you want to buy shares in Nigeria.
Most investors now buy shares using online investment platforms that allow them to own an investment account. In this article, we will throw light on how to buy shares in Nigeria and also highlight some strategies to buy shares.
Nigerians are becoming more interested in managing their money and growing wealth. The dawn of fintechs companies has blown the flames of interest in online investment opportunities in Nigeria from both the young and the old alike.
Also See: Best Sites to Buy Bitcoin in Nigeria
About The Nigerian Exchange Group (NGX)
Stock exchanges or a stock market facilitate the trading of securities like bonds, equities, stocks, or shares. Stock exchanges are a formal structure for companies to list shares. Without a stock exchange, the ability to publicly trade shares would not exist. In essence, exchanges work to match potential buyers with sellers on the exchange.
The NGX started in 1960 as the Lagos Stock Exchange, now home to arguably the largest economy in Africa, Nigeria, and is well-regulated by the Securities and Exchange Commission of Nigeria.
The Nigerian Exchange Group provides access to capital for both Nigerian and international companies. The Nigeria Exchange Group sees to it that the capital market is able to fund strategic business growth and expansion.
It is licensed under the Investments and Securities act and all listings are included on the All-Share Index of NGX, which was founded in 1984 and which has a base value of 100.
The Nigerian Exchange Group (NGX) is licensed under the Investments and Securities act, it is also a founding member of the African Securities Exchange Commission as well as the World Economic Forum.
Check out: How to Buy Electricity Online in Nigeria
How Does Stock Trading Work?
Stock trading is simply the buying and selling of shares on a stock exchange, with the expectation that your stock will appreciate and have more worth.
When you buy and hold shares long-term, it is considered a share investment. But if you are short-term trading, then you’re trend trading, and looking for an immediate lucrative reward.
Short-term trading or day trading is the most common stock trading around as it involves buying shares when they are low and selling them when they go up, often within the same day or even hour.
The traders who employ this strategy are called day traders and they rely on small changes in the price of a stock to make small amounts of profit that add up across several trades.
The key to buying shares or stock or even making any investment is to choose a strategy with a level of risk that you can accept, and one you can carry out. Here are some great strategies to buy shares in Nigeria:
1. Set Long-Term Goals
Before you start investing, you need to understand your purpose for investing and have at least an estimated future time frame when you may need the funds. Because the stock market with its volatility won’t provide any certainty that all of your capital will be available when needed.
By setting goals for the type of returns you want your capital to bring and the time frame for an investment, you can estimate how much you should invest and the returns to expect on your investment if you are to produce the desired results.
2. Buy Low & Sell High
This point of investing is obvious— you buy assets at a low price with the expectation that you can sell them at a higher price. Buying stocks or shares is no different. Because over a long period, good stocks offer great potential for growth, one that can bring massive capital appreciation.
3. Assess a stock’s volatility
To understand a company’s stock volatility and avoid any emotional pitfalls you might have when there’s a downfall in stock value, you need to look at the company’s stock average performance (rolling 12-month standard deviation) over the past 10 years. A normal standard deviation for stock averages is about 17%, which means it is typical for that stock value to increase or reduce in esteem by 17%.
You can buy shares on the Nigerian stock exchange and even foreign stock from Nigeria like Facebook, Tesla, Apple, etc from stock exchanges in the US. You can not buy these stocks by just walking into any exchange and picking up shares to buy like you would do groceries. You need to go through a stockbroker.
However, different brokers charge differently and offer different types of support, and financial advice to their clients. So it is important that you carefully choose a stockbroker who suits your unique investment needs and objectives.
For personal stock brokers, once you have registered an account with them, you can place your order with the broker, and they will complete the transaction while adding their fees.
Here’s a proven checklist on how to buy shares in Nigeria:
1. Have a Bank Account Number
In order to buy shares in Nigeria, you need to have a Nigerian bank account. it is a prerequisite, to invest in the stock market and buy shares, so make sure you have one.
2. Sign Up With a Good Broker
As we mentioned earlier, you can choose to go with a personal broker or an online stock broker, the choice is yours. But to remove as much bureaucracy, I recommend you go with an online stock broker, which will allow you to start buying shares using just your smartphone or any internet-enabled device.
With these online stock brokers, you can easily buy local or foreign shares from Nigeria with ease.
Here is a list of secure and legit online stock brokers you can use to buy shares in Nigeria:
From as low as $10 invest with the Risevest app in dollar investment opportunities like buying foreign shares from Nigeria. Risevest allows anyone to make automated investments in 30 high-growth stocks on the US exchange, fixed income assets like Eurobonds and US real estate.
It’s simpler to see Rise as more of an online Investment fund has you pick your investment type and the experts at Rise actually make the actual investments themselves.
Rise annual return on foreign shares is about 14%. Note that actual returns can depend on the market. The Rise app is available on Android and on iOS.
You can also buy foreign shares from Nigeria with Chaka. It is an online investment platform in Nigeria where you can buy and sell US, Nigerian, and Chinese stock.
You can start buying foreign shares with Chaka from as low as $10.
Chaka is available on Android and iOS.
3. Bamboo Invest
Buy foreign shares from Nigeria with Bamboo for as low as $20. There are over 3500 American and Nigerian shares on the Bamboo app. Every Bamboo account is insured up to $500,000.
You can build your personal wealth with Bamboo by buying shares in Nigeria from your smartphone. This online investment platform has bank-level state of the art security.
You can use Bamboo on Android and on iOS.
4. Trove App
Anyone can buy shares in Nigeria using the Trove app. Buy American, Chinese and Nigerian shares starting with a minimum amount of N1000.
You can also buy other assets like bonds, ETFs and using Trove. They also offer investing guides that help you become a smart investor. You can use trove on Andriod, iOs and on the web.
Wealth.ng also offers personal wealth advisors on its platform. Wealth.ng also allows people give gifts by buying shares and other investment products in their name.
Wealth.ng lets anyone buy shares in Nigeria through its app and Website from the Nigeria stock exchange.
You can also invest in treasury bills, mutual funds, agriculture and real estate with wealth.ng. You can use Wealth.ng through its website or its app.
3. Open a Trading Account
After signing up with a broker, the next thing is to open a trading account. he process of buying and selling shares will also require a Trading account as it acts as an acts as an intermediary that facilitates the buying and selling.
You cannot hold shares in physical form, they have to be in a Dematerialized state, this is what a trading account does that for you. It will store the shares in your account in your name. Usually, your broker takes care of opening a trading account. Whether you approach a broking firm, online stock broker, or an individual broker, you’ll go through a trading account opening process.
The lat step but not the least is to choose the right shares to purchase. To buy and sell shares, you need to inform your stock broker about which share you want to buy or sell, the quantity, and at what price you wish to buy the shares.
For example, if you wish to buy 50 shares of Tesla when it reaches $1500, you have to inform the broker : Share: Tesla., Quantity: 50, Price: $1500.
Online brokers usually have forms on their apps or platforms where you can place your order. If you do not have access to the internet, their customer care should be able to take your order.
Further, when the share reaches the price you quoted in your order, a transaction will be made on your behalf. It is important to also note that buy and sell orders remain valid only up to a certain time frame, usually the same day or the next day. If the buy or sell price is not reached during this time frame, the order is cancelled and you need to place a new order.
You must always remember to choose a trusted stock broker for trading in the stock markets. Choose the method of investment based on your long-term financial goals, and make your buy and sell decisions after considering the market movement and the price of the share you’re interested in.
By using a personal broker or any of the online brokers mentioned above.
You can use Risevest app, Trove app, Bamboo, Chaka and Welth.ng to buy shares in Nigeria.
Currently the best shares to buy in Nigeria is MTN, GTB and some others. Note; this is not investment advice.
The process of selling your shares is a simple one and can be completed within 48 hours by making a sell order. However, to sell shares, apart from the stock trading account, you also need to have a Central Securities Clearing System (CSCS) account, which online stock brokers provide when you sign up wit them.
How can I buy Apple stock in Nigeria?
You can buy Apple stock in Nigeria by following these steps:
– Step 1: Find a Good online broker.
– Step 2: Open your brokerage account.
– Step 3:Deposit money into your account.
– Step 4: Make a buy order for the Apple share you want to buy.
– Step 5: Review your Apple Stock position regularly.
Can I buy US stocks from Nigeria?
Yes, you can. There are stock trading apps that let you buy US stocks from Nigeria.