Nigeria has a great range of worthy investment opportunities, but the risks involved in these ventures can be minimized by following a few important tips regarding how to buy shares in Nigeria.
As with all investments in stocks, the driving principle is the decline of cash value in the face of growing inflation. Investing in Nigerian stocks is one of several trading options for increasing the value of your capital.
Nigeria has a great range of worthy investment opportunities, but the risks involved in these ventures can be minimized by following a few important tips regarding how to buy shares in Nigeria
These don’t centre only in the premier investment portfolios available but also involve the methods by which investments are made. Good practice always begins with thorough research into these aspects of the venture.
Selecting a stockbroker
In 2020 Bloomberg cited Nigeria as the best equities market among 93 others worldwide. Though this status has since declined, stock trading in this country is still considered by pundits to offer very good opportunities.
These opportunities are best realized by appointing an online stockbroker with a proven track record and having the necessary accreditation.
Your broker should be easily available to you and should have an active status with the Securities and Exchange Commission. Look out also for the kind of minimum investment required, and ensure that you are able to afford the package before committing yourself.
Choosing your investment methodology
No investment venture is entirely risk free, but risk can be reduced by spreading your capital across a relatively safe range of stock purchases. The safest performers among Nigerian stocks are those related to the petroleum, whole grain, telecommunications and financial service provider sectors.
The most secure entry-level method is to invest in mutual funds which are administered by experienced professionals, and should deliver secure medium- to long-term results.
But higher risk, more profitable ventures can also be accessed via a stockbroker investing across a relatively consistent spread of well performing stocks. The important thing is to avoid unwarranted or emotional choices, which amount only to gambling.
Some Nigerian stocks worth considering
The following is a list of 10 stocks that come highly recommended by experienced brokers:
- Flour Mills of Nigeria
- BUA Foods
- Dangote Cement
- Zenith Bank
- Stanbic IBTC Holdings
- Nestle Nigeria
- Conoil Plc
- Seplat Energy Plc
- MTN Nigeria
- Unilever Nigeria
Before venturing on any choices, embark on a time of solid research involving not only the performances of various stocks but also factors such as political and social trends. Keep abreast of Nigerian news generally, with a keen focus on business conditions and legislation.
How to buy shares in Nigeria
- After a course of due research, make use of various online options provided by accredited stockbrokers or stockbrokerage groups.
- Pay close attention to the possibility of scam operators and fraudulent advice, and avoid these by dealing only with institutions of good standing.
- Use only the Nigerian Exchange Group (NGX) which is regulated by the Securities and Exchange Commission of Nigeria.
- Choose the broker most suitable to your own purposes, taking into account the various brokerage packages available, which will differ in terms of fees and minimum investment amounts.
- Make sure, when registering with your broker of choice, that your information is all correct, and that all legal and commercial requirements are met.
- Once you have been given your Clearing House Number (CHN), it is essential to have a Central Securities Clearing System Account (CSCS), which allows you to manage your portfolio autonomously.