How to buy stocks in Nigeria:
You must first research and compare brokers in Nigeria
Activate your account with a broker, such as RoboForex, by supplying your ID
You must first fund your live trading account to begin purchasing stocks
Locate and pick the shares you want to purchase
When you have decided how many individual shares you want to buy, place a share purchase order
Learning how to buy stocks in Nigeria is not a waste of time, as Nigerian stocks continue to stand out among their counterparts in Sub-Saharan Africa. Therefore, an investor should take the time to learn how to buy stocks online since it is one of the best ways to increase their wealth.
Nigeria continues to lead Africa in both business and digital literacy. The market position of stocks is unaffected by rising inflation and gloomy economic indicators. As a result, investors can buy stocks online with confidence because the online stock market is experiencing success and boosting investor confidence.
This article will show traders the steps and factors to consider if they want to understand how to buy stocks in Nigeria.
Want to buy stocks? Open an account with RoboForex!To begin investing in stocks, you need to select an online stock broker. Look for a broker that offers a user-friendly interface, low fees, good customer service, and a wide range of investment options. It is essential to ensure that the broker is regulated and operates within your country's jurisdiction.
For beginners, brokerages with extra benefits such as social trading can be invaluable as they offer opportunities to learn from experienced traders, as well as study best strategies. Additionally, access to comprehensive educational resources, fractional shares trading, and a diverse range of ETF investment options can further empower beginners in making well-informed and diversified investment decisions.
Once you have chosen a suitable broker, you'll need to sign up for an account. The registration process typically involves providing your personal information, which may include:
Your full name
Address and contact details
Date of birth
Social Security number (or equivalent)
Proof of identification (such as a driver's license or passport)
Employment and material status information is optional
Keep in mind that some brokers might require mandatory verification of your identity and documents.
To pay for the stocks you want to purchase, you'll need to deposit funds into your brokerage account. Most brokerages offer various funding options, such as bank transfers, credit/debit cards, or wire transfers.
Bank Transfers: Usually free or low-cost, but may take a few days to clear
Credit/Debit Cards: Instant, but may involve additional fees
Wire Transfers Instant, but may involve additional fees
How much money should I deposit for the first time? TU experts recommend starting with a small amount to understand the stock market and gain practical experience.
With your account funded, it's time to choose the stocks you want to buy. You can use your brokerage's research tools or other financial websites to gather information about potential investments. Take into consideration factors like your budget, risk tolerance, and long-term investment goals when making your decisions.
If you are inclined towards long-term investing, it is essential to focus on conservative trading strategies, prioritize portfolio diversification, and thoroughly understand the businesses of the companies you invest in. On the other hand, if you prefer active trading, consider learning technical analysis or other techniques to make informed decisions and navigate the dynamic nature of the stock market effectively.
There are different types of orders you should understand:
Market order executes the buy order at the current market price. It prioritizes execution speed over price, ensuring immediate execution
Market order use case: Investors who want to enter or exit a position quickly, especially in highly liquid stocks.
Limit order sets a specific price at which the investor is willing to buy or sell a stock. It allows investors to control the price at which the trade will execute, offering price protection
Limit order use case: Traders who want to buy or sell at a specific price and are willing to wait for the market to reach that price.
Stop order (stop-loss order) executes the order when the stock reaches a specified price. Stop orders are used to limit potential losses by triggering a sale if the stock's price moves unfavorably
Stop order use case: Traders who want to protect their investments from significant price declines.
The stock market can be volatile, and the value of your holdings may fluctuate. Stay informed about the companies you've invested in and keep an eye on market trends. Remember that investing is a long-term endeavor, and it's essential to review and adjust your portfolio periodically based on your financial goals and risk tolerance.
By following these steps and staying informed, you can start your journey into the world of online stock investing. Remember that investing involves risks, and it's crucial to do thorough research and seek professional advice if needed. Happy investing!
The next task for a trader who understands how to buy stocks in Nigeria is to learn how to sell these stocks. Investors can start offsetting their position as the price of the stock rises once it reaches the price target range. However, it is simple to sell stocks in Nigeria, and you will need a stockbroker. An extensive procedure for selling stocks in Nigeria is provided below.
The first step is determining the value of your shares by looking up the current market price of those shares on an NSE website that offers up-to-the-minute data on share prices
The next step is to locate a licensed stockbroker. Before opening a stockbroking account with these brokers, compare them based on their reputation, fees, and services provided
Fill out the account registration form by including your name, address, and proof of identification
Browse through the stockbroker services and navigate to the sell shares option to initiate the sale. Follow the prompts to get your shares on the platform. You must include all pertinent information, such as the number of shares and prices
If the procedure is successful, the stockbroker will confirm the sale, and you will receive a contract note that confirms the specifics of the sale for appropriate review
The broker will carry out your sell order, and the Nigerian Stock Exchange will handle the transaction. Be mindful of any additional costs or taxes that could apply when selling stocks in Nigeria, such as the capital gains tax
You will get paid for your shares once the sale is official. The payment will be deposited into your stock brokerage account, from which you can take out the money as required
Note:
Ensure you transact with a licensed stockbroker because online stock trading is a delicate financial endeavor. It takes time to sell shares, so it is crucial to be patient and wait until the best-selling window. Also, ensure you understand the implications of selling your stocks. Watch the performance of the stock you want to sell, and only sell shares when it is performing well.
Finding out if investing in the stock market is halal or haram is one of the stock trading facts you should know before learning about the advantages of buying stocks online in Nigeria. Since both the stock issuer and stockholder gain from investing in the stock market, it is not haram.
Given how well stocks are performing in the Nigerian economy, learning how to buy stocks in Nigeria may prove more profitable than anticipated. The Nigerian Exchange Limited (NGX) operates a coherent and comprehensible market that connects global investors. By learning how to buy stocks online, you can protect your money from taxes and inflation while maximizing your investment income.
Again, these payments may provide you with monthly investment income and thus raise your return on investment (ROI) due to the favorable tax treatment of equity investments. While there are several benefits to buying stocks online, the top advantages of buying stocks in Nigeria for investors are listed below.
When you buy stocks online, you contribute to your capital growth or raise an asset's or investment's value over time. Investors can increase their investment through dividends and capital gains by purchasing common shares, which give them a residual claim on a company's earnings.
Buying shares in Nigeria rewards the investor with dividend income, which is money that the business distributes to its shareholders. A company's annual revenue or profits will determine your dividend income for the share you are holding. And you receive payment for this in the form of cash for the company shares you currently own. To distribute profits to shareholders every quarter, a company frequently reinvests cash or stock.
Online share buys make it simple to spread your investments among several companies. However, this restricts your exposure to a single asset class and, over time, lowers your portfolio's volatility. For example, you can buy at least 25 stocks across various industries, which is a good rule of thumb.
Shares are the same as ownership in a company. When you buy stock in a company, you become a shareholder and have some voting rights. Although you must purchase a significant number of shares of the company to cast a vote, ownership of shares gives you some administrative privileges. The right to vote grants a shareholder some influence over choosing the company's management and board of directors.
Investors may gain from favorable long-term tax terms by making stock investments, which may mitigate the adverse impact of certain variables. The advantageous tax treatment of Nigerian stocks enables their owners to keep a larger portion of their profits.
Yes, in general, stock investing is safe, but you should learn some basic safe investing rules that will help protect your money.
Research and select a well-established, reputable online brokerage platform with a track record of security and customer satisfaction
Buy stocks using a secure internet connection, preferably your private home network, to reduce the risk of unauthorized access or data interception
Create strong and unique passwords for your brokerage account, incorporating a combination of letters, numbers, and special characters
Enable 2FA whenever possible. This adds an extra layer of security by requiring a second form of verification, such as a code sent to your mobile device, before accessing your account
When funding your brokerage account or making transactions, use secure payment methods such as bank transfers or credit cards. Avoid sharing credit card details directly with third parties
Be cautious about sharing unnecessary personal information online, especially on social media platforms, to minimize the risk of identity theft or fraud
Keep a close eye on your brokerage account's activity. Regularly review statements and transaction history for any unauthorized or suspicious transactions
Educate yourself about common stock frauds and phishing attempts related to stock trading
Yes, Nigerians can trade stocks with international brokers. Additionally, opening an account with well-known online brokers or trading applications like eToro, RoboForex, or IC Markets is simple. These brokers offer a broad range of foreign securities to investors looking to buy stocks online. You can trade CFDs on stocks of the most important companies from Germany, the USA, and Switzerland with the help of a broker like RoboForex.
Nigerian investors can open accounts and trade stocks listed on different international stock exchanges through an online brokerage platform. These brokers are well-established and integrate internationally accessible platforms that are simple to use. But investors must buy stocks online from trusted stockbrokers. These include the likes of eToro, TD Ameritrade, E*TRADE, Bamboo, and Interactive Brokers.
It is essential to confirm that the stockbrokers you select are subject to the supervision of reputable financial regulators. The offshore stockbroker you choose in Nigeria must follow the principles of top regulators like the FCA (Financial Conduct Authority) and ASIC (Australian Securities and Investment Commission), which are tier-1 regulators. These financial regulators enhance the security of your assets.
While the prices of stocks differ depending on the company and stockbroker, the minimum stock investment is between 10 and 500 dollars. This can be converted to the local currency based on the market exchange rate, which is fluctuating.
You might come across stockbrokers with a higher minimum equivalent of one million nairas in the local currency. The type of financial account and exchange commissions also impact the minimum deposit.
You can invest small sums of money, such as $5 or $10 when purchasing stocks online from stockbrokers who provide fractional share trading as opposed to having to pay the share price. While several stockbrokers offer the fractional stock component, eToro is among the best stock brokers to get the most out of this feature.
At eToro, you can buy a portion of a share for $50 (a share costs $1,000 per unit). Additionally, buying shares in Nigeria on this platform is easy, so novice Nigerian stock traders and investors can buy shares without stress.
Yes. The availability of fractional shares is through reputable international brokers, which enables investors to access any security regardless of its price or available capital for investment. An international broker like eToro offers this fractional shares service and also provides traders access to buy stocks, options, CFDs, cryptocurrencies, and more.
While learning how to buy stocks in Nigeria, it is crucial to comprehend the tax limitations of buying stocks online. So are dividends taxable in Nigeria?
Yes, dividends received by a company based in Nigeria from another Nigerian company are taxable at the point of receipt. Similar to how a company's profits are taxed, dividends are also subject to 10% TDS. Dividends brought into Nigeria in convertible currency through authorized channels and paid into a local bank that has government approval are not subject to Nigerian taxation.
Dividends, which can be paid in cash, stocks, or a combination of cash and stocks, are gains or profits made while trading. For starters, in Nigeria, dividend payments are subject to a withholding tax (WHT) of 10%, which the company must deduct at source before sending the dividends to shareholders.
When shares are sold for a profit, there is a capital gain. The purchase and sale of stocks in Nigeria are not subject to capital gains taxes. And according to the Capital Gains Tax (CGT) Act, Cap, C1 LFN 2004 (as amended), 10% of the total chargeable gains are subject to tax.
You can buy shares online in Nigeria through international and local stockbrokers licensed by top regulatory bodies. These include eToro, Roboforex, Chaka, Bamboo, Wealth, etc. Some of these stockbrokers offer both investments in foreign and domestic securities.
The best stocks to buy in Nigeria include:
Unilever Nigeria (NGX: UNILEVER)
International Breweries (NGX: INTBREW)
Guaranty Trust Holding (NGX: GTCO)
UAC of Nigeria Plc (NGX: UACN)
MTN Nigeria Communications Plc (NGX: MTNN)
Dangote Sugar Refinery (NGX: DANGSUGAR)
Stanbic IBTC Holdings (NGX: STANBIC)
FBN Holdings Plc (NGX: FBNH)
You can purchase US shares as a citizen of Nigeria because no laws specifically forbid non-US citizens from investing in US stock exchanges like the NYSE (New York Stock Exchange), Nasdaq, etc.
The amount needed to purchase shares varies according to the stockbroker and the shares. As an illustration, to start purchasing shares of MTN and other Nigerian stocks on Trove, you must deposit a minimum of $1,000, while only $10 is needed to invest in foreign stocks. You can purchase shares from stockbrokers who support the fractional share feature for $5 or $10.
Peter Emmanuel Chijioke is a professional personal finance, Forex, crypto, blockchain, NFT, and Web3 writer and a contributor to the Traders Union website. As a computer science graduate with a robust background in programming, machine learning, and blockchain technology, he possesses a comprehensive understanding of software, technologies, cryptocurrency, and Forex trading.
Having skills in blockchain technology and over 7 years of experience in crafting technical articles on trading, software, and personal finance, he brings a unique blend of theoretical knowledge and practical expertise to the table. His skill set encompasses a diverse range of personal finance technologies and industries, making him a valuable asset to any team or project focused on innovative solutions, personal finance, and investing technologies.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).
