How To Buy Shares In Nigeria

Introduction.

Investing in shares can seem intimidating, but it’s one of the best ways to grow your money over time. If you’re in Nigeria and wondering how to get started, you’re not alone.

More Nigerians are becoming interested in the stock market, thanks to increasing awareness about financial literacy and the importance of wealth creation.

But where do you start? How do you pick the right shares? What steps are involved? This guide breaks it all down in simple terms, so you can start your investment journey with confidence.

Why Should You Buy Shares?

Buying shares means owning a small piece of a company. When that company grows or earns profits, you benefit as a shareholder.

Over time, shares have proven to be one of the best ways to beat inflation and build long-term wealth.

In Nigeria, the stock market is full of opportunities with companies in banking, telecommunications, agriculture, and even oil and gas.

How Do I Buy Shares in Nigeria?

1. Learn the Basics of Investing

Before diving in, take some time to understand the basics of how the stock market works. Learn about terms like dividends (profits shared with shareholders), capital appreciation (when the value of your shares increases), and risks involved.

There are plenty of free online resources, books, and even YouTube channels that explain stock market investing in Nigeria.

2. Choose a Stockbroker

You can’t buy shares directly from the stock market as an individual. Instead, you need to go through a stockbroker.

Stockbrokers are licensed professionals or firms authorized to trade shares on your behalf. Popular stockbrokers in Nigeria include:

• Meristem Stockbrokers
• ARM Securities
• Chapel Hill Denham
• Stanbic IBTC Stockbrokers

Compare their services, fees, and reputation before deciding. You can find a list of licensed brokers on the Nigerian Exchange Group (NGX) website.

3. Open a CSCS Account

Every investor needs a Central Securities Clearing System (CSCS) account. This is where your shares are electronically stored.

Once you choose a broker, they will help you set up this account. Think of it as your “bank account” for shares.

4. Fund Your Account

To buy shares, you need money in your brokerage account. Most brokers allow you to transfer funds directly from your bank account.

It’s important to decide how much you’re comfortable investing. Never invest money you can’t afford to lose, as stocks can sometimes go down in value.

5. Research and Pick the Right Shares

This step is crucial. Don’t just buy shares because someone recommended them or because a company is popular. Look at the company’s:

• Financial health (Is the company making a profit?)
• Industry position (Is it a leader in its field?)
• Growth potential (Does it have plans to expand or innovate?)

You can find this information in annual reports or by reading financial news. For beginners, it might be safer to start with well-established companies or “blue-chip” stocks like Dangote Cement, MTN Nigeria, or Zenith Bank.

6. Place Your Order

Once you’ve decided which shares to buy, inform your broker. They will execute the trade for you. Some brokers offer online platforms where you can handle this yourself.

7. Monitor Your Investment

After buying shares, keep track of their performance. This doesn’t mean you need to check daily (shares can fluctuate), but stay informed about the company and its industry. Over time, you might need to buy more shares, sell, or adjust your portfolio.

Why Now Is a Great Time to Invest

Nigeria’s economy is growing, with many sectors showing promise. For example, the telecommunications sector has seen significant growth, with companies like MTN and Airtel leading the charge. Similarly, financial institutions remain strong players on the stock market. By investing now, you’re positioning yourself to benefit from this growth.

FAQs

1. How much money do I need to start?

You can start with as little as ₦10,000 or ₦50,000, depending on the broker and the shares you want to buy. The key is consistency—investing regularly can have a big impact over time.

2. Are there risks involved?

Yes, all investments carry risks. Share prices can increase or decrease based on factors like the economy, company performance, and market trends. Diversifying—spreading your money across different shares—helps reduce risk.

3. Can I buy shares online?

Yes, many Nigerian brokers have online platforms or mobile apps. Apps like Trove, Bamboo, and Chaka also allow you to easily buy shares, including international stocks.

4. How do I earn money from shares?

You can earn through dividends (if the company pays them) and capital gains (if you sell your shares at a higher price than you bought them).

5. Is it safe to invest in shares in Nigeria?

The Securities and Exchange Commission (SEC) regulates the Nigerian stock market, so it’s generally safe. However, always work with licensed brokers and stay informed about your investments.

Conclusion

Buying shares in Nigeria is simpler than it might seem. With a bit of research and the right guidance, you can start building a portfolio that grows your wealth over time. Start small, stay consistent, and always make informed decisions.

What’s holding you back from investing in shares today