How to Invest on the Nigerian Stock Exchange

Investing in the Nigerian Stock Exchange is pretty straightforward. Here are simple steps to follow:

1. Get a broker. There are about 327 brokers licensed to trade on the Nigerian Stock Exchange. You can find the list of licensed stockbrokers on the Nigerian Stock Exchange here . It is quite a long list and you may be wondering where to start from. The easiest way to find information about each stockbroker is to search online to find their website to find the information you are looking for. It might involve making a phone call or sending an email. A recommendation by a trusted friend or colleague may help.
2. Open a brokerage account. You need to open an account with yoru selected stockbroker to enable you make funds available to the broker to carry out your buy or sell instructions. You will be given an account opening form to fill. Requirements may vary slightly from broker to broker, but typical requirements are: passport photographs, utility bills, ID card (driver's license, voters card, international passport etc), banking details, referees etc. You can obtain these details by phone or email or may be stated on the website.
3. Open a CSCS account. Your broker will give you CSCS account opening forms to fill. The Central Securities Clearing System (CSCS) is the central repositoriy of electronic share certificates are paper certificates are no longer in use. Every transaction on the floor of the Nigerian Stock Exchange is recorded at the CSCS. Your broker can send you period CSCS account statements or You can access your account directly at Central Securities Clearing System Limited website for a token fee of N2,500 per annum.
4. Fund your account. You need to fund your account after it has been opened. Each stockbroker has a minimum account upening amount. It can vary from N100,000 to N5,000,000 depending on the target clientele of each broker. This is one of the key questions you need to ask before deciding on which stockbroker to open an account with. The stockbroker will provide their account number to enable you make the bank transfer. Hardly any broker accepts cash. When your transfer has been confirmed, the amount will be credited to your brokerage account. Most brokers have facilities for their clients to check their accounts online and send instructions online. SOme also have platforms you can use to trade directly at the floor of the exchange online.

With your account fully opened and funded, you can go ahead to give instructions to buy XYZ number of shares of company ABC. Each transaction attracts a commision to the stockbrocker (transaction fees) and CSCS fees. If your account is fully funded to cover the order (including commision and fees), it will be executed when the market opens.

If your transaction is successful, your account will be debited accordingly or credited (if your slod shared) after 3 working days (T+3). You will also receive a contract note by email showing the details of the transactions, including commisions and fees.