Business. Investment. Making Money

How to Invest in the Nigerian Stock Exchange

Do you love a Nigerian public company and believe they are well-run and want to own a piece of it and get paid dividends?

Read on.

The Nigerian stock exchange (NSE)

A share or stock (the difference between both is based on context) is a piece of a company or several companies. When you buy a share, you are effectively part of the owners of the business.

Sounds cool right?

In Nigeria, you can only buy and sell shares of public companies on the Nigerian stock exchange, which is based in Lagos. For equities of private companies, the National Association of Security Dealers Over-The-Counter (NASD OTC) handles that.

The NSE is regulated by the Securities and Exchange Commission of Nigeria. They determine the rules of the stock market.

Nigerian stock exchange listed companies

Only shares of public companies can be bought on the stock exchange. We currently have more than 100 public companies listed on the exchange.

You can check the Nigerian stock exchange website for a list of these companies.

When a company sells shares for the first time on the NSE, it is called an Initial Public Offering (IPO).

Companies can also List by Introduction. That allows shareholders of a company to sell their shares on the floor of the exchange. A recent example is the listing of MTN Nigeria.

A subsequent offering of shares by companies can come as a Public Offering (PO) or a Rights Issue.

How to start buying shares in Nigeria

You need to open a brokerage account with an approved stockbroking firm in Nigeria.

Many stockbroking firms have online platforms where you can easily buy and sell shares. However, many also have a minimum initial deposit.

The typical documents requested for account opening are:

1. Means of Identification, (Driver’s License, International Passport, or National Identity Card)

2. Utility Bill (not older than 3months)

3. Passport photograph

5. Signature specimen

After confirming your documents, they would send you details of your Central Securities Clearing System (CSCS) account (which should take less than 1 week). CSCS maintains a computerized depository, clearing, settlement and delivery of all shares.

(You can then sign up on the CSCS website to view your portfolio independent of your stockbrokers. It costs N2,500 per annum.)

Once your stockbroker sets up your CSCS account, you can buy the shares of the company you prefer. Standard fees in the country are 1.725% when you purchase and 2.025 % when you sell. Some firms offer you lower fees, though.

Here’s a review of the top stockbroking firms in the country with their fees.

What about dividends?

Collecting dividends from Nigerian stocks is relatively painless now. Most stockbroking firm would help you handle the processing of your dividends and share bonuses.

Below is a list of dividend payment for 2018 from selected companies on the Nigerian stock exchange

Public CompaniesDividend per share (2019)
Transcorp Hotel 15kobo
Nigerian Breweries Plc 1.83kobo
Transnational Corp. of Nig. Plc 3kobo
Zenith Bank Plc 2.50kobo
United Capital Plc 30kobo
Dangote Cement N16
Nestle Nig Plc N38.50kobo
Seplat Petroleum Dev. Company Plc US$0.05
Guaranty Trust Bank Plc N2.45 kobo
Stanbic IBTC Holdings Plc N1.50kobo
Access Bank Plc 0.25kobo
UBA Plc 0.65k
Julius Berger Nig. Plc N2
Cadbury Nig. Plc 0.25kobo
11 PlcN8.25kobo
Dangote Sugar Refinery PlcN1.10kobo
FBN Holdings N0.26 kobo
Okomu Oil Palm Plc N3
Glaxo SmithKilne Consumer Nig. Plc N0.05 kobo
Total Nigeria Plc N14
FCMB Group Plc 0.14kobo

Source: Nairametrics.com, Nigeria stock exchange, Proshareng.com

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