How do I buy shares in Nigeria? A Neusroom explainer
About 10 to 15 years ago, if you wanted to buy shares in Nigeria as an Investor, you’d have to travel to the office of a stockbroker to obtain a form, register and start trading. But now, the process has been simplified with online applications.
Here’s your ultimate guide to buying shares in Nigeria without stepping out of your home.
Where Do I Start From?
Traditionally, you would need to set up an account with a brokerage company and deposit funds into the account, and you still can, but the Nigerian Exchange Limited (NGX) has now simplified the process with the Primary Offer app, which allows you to buy and sell stocks online without leaving your home or visiting a brokerage company to fill paper applications.
What Do I Need To Set Up An Online Account?
To set up an account on the Primary Offer App, you need your Bank Verification Number (BVN). The App will also ask for your date of birth. As soon as you insert these details, it brings out all the details you submitted during your BVN registration. They include your name, home address, email address, phone number; then, you’ll have to provide other details not displayed.
What Happens Next?
After setting up your account, you’ll receive a six-digit verification code via email.
Now you can start buying and trading stocks.
The App will list available stocks on your dashboard with information about them.
The only offer on the App as of Wednesday, December 8, 2021, is the MTN Public Offer selling at ₦169 at a minimum of 20 units.
Click on the offer to read more and proceed to buy. Read and accept the terms and conditions and proceed to purchase.
You’ll be asked to state the number of units you want to buy at the point of purchase, and it will automatically display the amount. For instance, if you’re buying 200 units of the MTN Public offer selling at N169, the App will display the total amount of N33,800.
Accept the purchase conditions and proceed to make payment.
The App will ask you if you have a CSCS number. Since you’re a newbie, your answer should be no, and it will inform you that a CSCS account number will be created for you and ask if you want to proceed.
What Is A CSCS Account Number?
The Central Securities Clearing System oversees the Nigerian Stock Exchange, and it issues the CSCS number to new investors after opening a new brokerage account.
With this number, you can buy and sell shares or transfer ownership.
One of the benefits of the Primary Offer app is that it creates a CSCS account number and CHN for you without any hassle; it also assigns you to a brokerage company at your request.
The Clearing House number (CHN) ties your account to the stockbroking house.
How Much Do I Need To Start Investing In Stocks?
This depends on the unit price of the shares and the number of units you can afford. For the MTN Nigeria Offer, the entry point is 20 shares and with ₦3,380, you can buy 20 units to become a shareholder with MTN Nigeria.
What Next?
You’ll have to wait for a few weeks for settlement and allocation of shares which will happen when the Offer closes. That is when you become a shareholder; what’s next is to earn dividends – the profit paid to you by the company where you hold shares. For instance, if you buy the ongoing shares in MTN Nigeria, when MTN announces profit and payment of shareholders’ dividends at the end of the financial year, you’ll also receive dividends based on the units of shares you have bought in the company.
Meanwhile, some companies at their early stage prefer to reinvest most of their profit to help sustain the higher growth and expansion. On the other hand, established companies like MTN offer regular dividends.
