If you’d like to buy shares in Nigeria, there are a few things you need to know. In this post, you’ll find out the basic of buying shares from the agency that regulates the process to stockbroking firms involved.
Let’s start right away.
Generally, companies list their shares on the Nigerian Stock Exchange (NSE). The NSE was founded in 1960 and it is licensed under the Investments and Securities Act (ISA).
The NSE is regulated by the Securities and Exchange Commission (SEC) of Nigeria. NSE offers listing and trading services, licensing services, market data solutions, ancillary technology services and more.
As of March 2018, there were 176 companies listed on the NSE and their combined market capitalisation was about ₦8.5 trillion.
When buying shares, the first step to take is to do your research and find the shares you’re willing to buy then contact your preferred stockbroker and submit a trade order via email.
Your broker will respond by executing your trade and sending you a contract note that specifies the buy or sell price, commissions, and fees.
Currently, there are 327 brokers licensed to trade on the Nigerian Stock Exchange. Just in case you’re wondering who they are, below is a comprehensive list:
- Adonai Stockbrokers Limited
- Afrinvest West Africa (formerly Sectrust)
- Ail Securities Limited
- Alliance Capital Management Company Limited
- Amyn Investments Limited
- Anchoria Investment and Securities Limited
- APT Securities & Funds Limited
- ARM Assets and Resources Management Ltd
- Belfry Investment and Securities Limited
- Bestworth Assets & Trust Limited
- BGL Securities Limited
- Calyx Securities Limited
- Camry Securities Limited
- Capital Express Securities Limited
- Capital Assets Limited
- Capital Bancorp Limited
- Capital Trust Brokers Limited
- Cashcraft Asset Management Limited
- Cashville Investment & Securities Limited
- Century Securities Limited
- City-Code Trust Limited
- Clearview Investment Company Limited
- Consolidated Investments Limited
- Core Trust and Investment Limited
- Crossworld Securities Limited
- CSL Stockbrokers Limited
- Davandy Finance & Securities Limited
- De-Canon Investment Limited
- Delords Securities Limited
- Denham Management Limited
- Dependable Securities Limited
- Dominion Trust Limited
- Dynamic Portfolio Limited
- Empire Securities Limited
- ESL Securities Limited
- Eurocomm Securities Limited
- F & C Securities Limited
- FSDH Securities Limited (formerly Counters Trust)
- Falcon Securities Limited
- Fidelity Union Securities Limited
- First Stockbrokers Limited
- FIS Securities Limited
- Fittco Securities Limited
- Foresight Securities & Investment Limited
- Forte Asset Management Limited
- Forthright Securities & Investments Limited
- Fountain Securities Limited
- Future View Securities Limited
- Greenwich Trust Limited
- GTI Capital Limited
- Heartbeat Investments Limited
- Horizon Stockbrokers Limited
- IBTC Asset Management Limited
- ICMG Securities Limited
- Icon Stockbrokers Limited
- Independent Securities Limited
- Intercontinental Securities Limited
- International Standard Securities Limited
- LB Securities Limited
- Lead Capital Limited
- Lighthouse Asset Management Limited
- Magnartis Finance and Investment Limited
- Maninvest Asset Management Limited
- Marina Securities Limited
- Maxifund Investments & Securities Limited
- Mayfield Investments Limited
- MBC Securities Limited
- Mega Equities Limited
- Meristem Securities Limited (formerly Great Africa Securities)
- Mission Securities Limited
- Mountain Investments and Securities Ltd
- Mutual Alliance Investments and Securities Limited
- Newdevco Finance Services Co. Limited
- Nigerian Stockbrokers Limited
- Omas Investments & Trust Company Limited
- Options Securities Limited
- Partnership Investment Company Limited
- Pilot Securities Limited (Pilot Finance)
- PIPC Securities Limited
- Pivot Trust and Investment Company Limited
- Professional Stockbrokers Limited
- Profund Securities Limited
- Prominent Securities Limited
- PSI Securities Limited
- Reward Investments and Services Limited
- Rostrum Investment & Securities Limited
- SanTrust Securities Ltd
- Securities Solutions Limited
- Security Swaps Limited
- Shalom Investment & Securities Transactions Limited
- Signet Investments & Securities Limited
- Solid-Rock Securities & Investment Limited
- Springboard Trust & Investment Limited
- Stanwal Securities Limited
- Strategy & Arbitrage Limited
- Summa Guaranty & Trust Co. Plc
- Summit Finance Company Limited
- Tiddo Securities Limited
- ARM Securities
- Cardina lStone
- Chapel Hill Denham
- Cowry Securities
- Lead Capital
- Meristem
- UBA Stockbrokers
- Zenith Securities
The minimum initial deposit range between N50,000 to N1,000,000 depending on the stock-broking firm
In terms of commissions and fees, these are evaluated on a sliding scale that is standard across all brokers. For instance, if your transactions is less than N1,000,000 (roughly $6,350.00) you will pay 1.86% when buying shares and 2.19% when selling one.
For larger transactions, commissions and fees total 1.49% of the total transaction value to buy and 1.82% of the total transaction value to sell.
How to Buy Shares in Nigeria: Steps Involved
Below are the steps involved in buying shares
Step 1: Complete the CSCS Account Opening Form
The Central Securities Clearing System (CSCS) records the ownership of Nigerian securities via electronic accounts.
Usually, when you request a broker to open a trading account, you will be sent a copy of the CSCS Account Opening Form. You will then be assigned a CSCS account number. This number will accompany every Nigerian stock trade you execute, allowing the CSCS to keep record of all your holdings in the country.
Step 2: Complete the Broker’s Account Opening Form
After receiving your CSCS account number, you will also fill your account opening form. You can request for sample forms from your selected broker in order to fill the form correctly. Some of the information, you’re expected to fill include your ID number, address, and banking details.
Step 3: Get two color passport-sized photos of yourself
Step 4: Photocopy the following documents
- ID card either your international passport or driver’s license
- A recent utility bill that can be used to verify your place of residence
Step 5: Send the original CSCS form, account opening form, passport photos and the photocopied documents to your broker
You can use any suitable and reliable courier service to achieve this. Also, you can send the photocopies of all the documents via email but you must send the original documents as well.
Step 6: Deposit the funds in your brokerage account
Once your broker provides you with the necessary bank details, you can transfer the necessary funds to the account. You can take your broker’s bank details to your local bank branch and let them assist you with the process.
Usually, the settlement of shares trade takes four business days on the Nigerian Stock Exchange.
Anytime you want to collect the dividend of your shares, all you need to do is write to your broker indicating that you want all dividends paid on your holdings to be deposited directly into your trading account.