This article is a beginner friendly introduction to the Nigeria Stock Exchange. It explains the basics of stock trading in Nigeria to the understanding of young and aspiring business moguls in Nigeria.
A stock exchange is a marketplace, where financial securities issued by companies are bought and sold. Securities issued by companies, such as shares and bonds, are traded at the stock exchange after they have been issued in the capital market. When you buy shares or stocks in a company, you are purchasing a “small piece” of that company, and you hold stakes in that company to the value of the shares purchased.
How the stock exchange works
Companies list their stocks or shares on an exchange through a process called an Initial Public Offering (IPO). Investors purchase those shares, which allows the company to raise money to grow its business. These investors can go on to buy and sell stocks among themselves. The price for each security is influenced by supply and demand.
Examples of Stock Exchange Markets
Nigerian Stock Exchange
New York Stock Exchange
London Stock Exchange
Dow Jones, among others.
What Stock Markets Do
Stock markets provide a secure and regulated environment where market participants can transact in shares and other eligible financial instruments without worrying too much about operational risks. It is one of the most vital components of a free-market economy.
Benefits of Stock Trading
Trading in stocks and being listed on stock exchange markets is highly beneficial for businesses. Every business should strive to trade in stocks, for the following reasons:
– Trading in the stock exchange creates market valuation for the business and creates an opportunity for the business to raise capital, with a view to further expansion.
– Being involved in stock trading improves the public profile of the business, and makes it easier to attract investors.
– Stock trading also improves the confidence of potential customers and investors in the business.
– Trading in stocks will protect a business in the event of an economic downturn, as these securities exist as assets for the business.
The stock market also works for the benefit of investors, whether individual or corporate. Investing in the stock market and taking advantage of investment opportunities is advantageous in the following ways:
– It provides an opportunity for investors to generate more income. The stock market tends to rise in value, and investing in stable companies will increase the chances of generating profit.
– It helps to build wealth by leveraging growth in different sectors of the economy. When you put money into different types of securities, it diversifies your assets.
– Some stocks provide income in the form of dividends. Stocks that offer dividends usually deliver annual payments to investors. Income from dividends can help fund future business ventures, and at the same time expand your business portfolio.
– Buying stocks in companies translates to acquiring an ownership stake in the company you invest in. Being a shareholder of a company gives you the power to vote on board resolutions and crucial business decisions.
How Can Paga Help You Invest?
You can begin your journey into stock trading in Nigeria, investing, and start owning company stakes by purchasing stocks at the Wealth.ng marketplace on Paga, a leading payment solution provider. Wealth.ng is an investment marketplace that makes it easy for you to invest money in treasury bills, stocks, mutual funds, and real estate. With Wealth.ng, you can grow wealth by investing in any of the treasury bills, stocks, and other securities listed on the platform. You can monitor your investments in real-time and see how much interest accrues to you when your investment matures.
Wealth.ng holds your hand through the investment process and guides your hand each step of the way. You have total control over your investments, and you can make changes to your personal profile settings at any time.
Investing with Wealth.ng comes with multiple benefits: These include:
- Access to a bouquet of valuable investment products.
- Expert advice pertaining to investment and wealth creation from seasoned experts.
- Competitive returns on investment.
- Unlimited access to a personal wealth advisor.
You can trade on Wealth.ng via Paga by simply taking the following steps:
– Log into your wallet.
– Go to “manage investments” on the side navigation.
– Select the product you want to invest in, and click “Buy” to add to your cart.
– Go to your cart and checkout.
– To sell a product you already own, go to the “my portfolio” tab, scroll down to see your transaction statement, and click on the product to view its detail page. Click on the “sell” button and the funds will be credited into your Paga wallet.
Investment comes with its risks, but the benefits far outweigh the dangers. In an economy that is rapidly fluctuating, it would be unwise not to actively strive to generate more income. The best time to start investing in financial securities is now.