You might have heard that buying shares is something, only the extremely rich can do. But what if I told you that time has changed and in this current age, you too can own a share of a company from the comfort of your bed.
You’ve probably heard about the Nigerian Stock Exchange, also known by the acronym (NSE). The Nigerian Stock Exchange is one of the largest stock markets in Africa. You’ve probably also been told that investing in the Nigerian stock market can earn you a decent amount of profit and boost your income.
What if I told you that you can buy shares from the comfort of your home?
Several companies trade shares on the floor of the NSE. These shares have the ability to increase and decrease in value depending on certain market conditions. With some market knowledge, you have the ability to buy shares that increase in value and make a profit while lying in your bed.
The aim of this post is to teach you exactly how to do that.
Buying and selling shares on the NSE takes a process. It’s very different from buying products online or in a supermarket. If you want to buy shares in the Nigerian Stock exchange, here are three simple steps you can follow.
1. Open A Brokerage Account
In order for you to trade in the Nigerian stock market, you will need to open a brokerage account. A brokerage account is an investment account. This account enables you to buy and sell investments such as shares, stocks, bonds etc. You will be unable to buy shares in the Nigerian stock market without a brokerage account. To open a brokerage account, you will need to apply with any of the approved stock broking firms in Nigeria.
Some of these are Meristem Securities Limited, Tiddo Securities Limited, Afrinvest West Africa, PIPC Securities Limited and Capital Trust Brokers Limited. There are several other stockbroking firms in the country. You just have to conduct thorough research and make a choice.
To open the brokerage account, the stockbroking firm will request for your passport photograph, bank account details which includes your Bank Verification Number (BVN), a valid means of identification, your next of kin details and the signatures of the account holders. The process of creating the brokerage account is not cumbersome.
Once you have submitted your application, your account will be created in two days or less. If you do not want to visit the physical office of your stockbroking firm, enquire if they have an online platform through which you can create your account from the comfort of your home. This is much easier as you simply have to upload all the requirements into their portal and wait for your account to be created.
2.Open A CSCS Account
Once your brokerage account has been created, the next advisable step is to create a CSCS account. The acronym CSCS simply means Central Securities Clearing System. The CSCS works under the Nigerian Stock Exchange. They store, clear and settle all transactions relating to stocks, bonds and other forms of investment.
The CSCS also maintains and holds the accounts of every stockbroker. Owing a CSCS account allows you an extra level of independence concerning your investment. If you open a CSCS account, you will be able to view your stocks and prevent fraud without having to go through your stock brokers.
To open a CSCS account, you will need the help of your stockbroker. To open a CSCS account, you will need A means of Identification either your Driver’s licence, National ID or International Passport. You will also need a passport photograph and a copy of your utility bill. Your stockbroker will also request for Incorporation documents and that you complete a CSCS account opening form. You might be charged by your stockbroker but opening a CSCS account is usually free.
Once your stock brokerage account has been created, your stockbroker will give you a personal and unique number. This number is known as your Clearing House Number (CHN). Once this number has been given to you, Congrats! You can now trade stocks from the comfort of your home.
To begin, you only have to follow these simple steps. First, you should look up the companies you want to invest in and find out their share price. Your stockbroker will also help to advise you on which shares you should buy. They also give ideas on what shares you should sell or hold.
There are two ways to trade from the comfort of your home. You can decide to buy stocks either by mail or using the online platform of your stock broker’s company. However, it is important for you to note that every transaction you make will be done by your stockbroker. He or she will execute all your trades with the Nigerian stock exchange.
The second step involves you funding your account. Your stockbroker will give you the bank details of the account you are to fund. Once you’ve made payment and it is confirmed, he or she will fund your stock brokerage account immediately.
The third step involves finally trading. To do this, you can either ask your stock broker to trade for you by sending him or her instructions via email or you can trade yourself using the online trading platform of your stock brokerage company.
If you read through the post, then you already know how easy it is to start trading on the Nigerian stock exchange. You simply need to conduct research and get a good stock brokerage company.
The next step is creating your CSCS account which will be done for you by your stockbroker.
Note that your stockbroker charges certain fees for their services. This is because your stockbroker is your link to the NSE.
Your stockbroker also acts like your adviser. If you have very little knowledge of the market, you can ask for his or her opinion on which stocks to buy and which to sell or hold. They will also help you with all your trades. Once you receive your Clearing House Number, you can begin to trade either by communicating with your broker via email or using the online platform.