Have you ever wondered what goes on on the the floor of the Nigerian Stock Exchange? Do you know that you can be an active player on the floor of the Nigerian Stock Exchange?
With this easy steps and tips, I will show you how to become a shareholder in a company and make dividend from it.
First what is a share?
Businessdictionary.com defines a share as the total unit of ownership claim in a business. The holder of a share known as a shareholder, is entitled to the company's profits (Dividend) and an equal obligation for the company's debts and losses.
An ordinary shareholder (Common Stock) receive profits (Dividend) after the preferred shareholders are paid and are entitled to vote at the Annual General Meeting of the Company (AGM).
A preference shareholder on the other hand is entitled to fixed rate of profit (Dividend) and in the event of closure, are entitled to company assets first before consideration is given to common shareholders. They are however not allowed to vote.
What then is a stock?
Well stocks and shares are often used interchangeably. A stock represents a share of a company held by an individual or group.
How then do I buy shares?
In order to buy stocks, you need the assistance of a stockbroker who is licensed to purchase securities on your behalf.
What are securities?
A security is a financial instrument that represents an ownership position in a publicly-traded corporation. E.g stock, bonds, debentures etc.
Where then can I get a stockbroker?
Stockbrokers who are licensed to buy and sell securities are found on the floor of the Nigerian Stock Exchange or Over the Counter. They will receive a small commission from you. Over-the-counter (OTC) trading is done directly between two parties, without any supervision of the Nigerian Stock Exchange.
What is Nigerian Stock Exchange?
The Nigerian Stock Exchange which came into full operation in 1960, is a market where stock brokers and traders can buy and/or ell stocks (shares), bonds and other security.
The NSE has about 200 listed companies with a total market capitalization of about N12.88 trillion ($80.8 billion). All listings are included in the Nigerian Stock Exchange All Shares index.
How Much Do I Need to buy shares?
Well depending on the size of the company. A share can go for as low as N5,000 to as high as you can invest.
What should I consider before buying?
The first point to consider is whether you can afford to lose the money. Shares are not risk-free investments, so if you need the cash to pay the mortgage or school fees, tread very carefully.
It is also useful to do your own research. Read a company’s latest annual report, look at its website and seek advice from your broker. Think about your investment aims and your time horizon, too.
This will influence the type of shares that you want to buy. Big, stable companies with decent dividends tend to deliver long-term rewards. Smaller, riskier companies can offer short-term excitement.
How Do I contact a stockbroker?
You can contact a stockbroker by giving him a call, sending him a mail or paying him a visit. Click the link below for a list of Top Nigerian Stockbrokers.
Click Stockbroker Directory
Hope You find this article interesting?
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