Have you been thinking of starting an investment in stock? A working capital is an important requirement if you want to buy a stock.
It is the duty of a stock broker to buy a share as they have been authorized by the Nigerian Stock Exchange to perform such duties. Therefore, it is important you choose the type of shares you buy before engaging the services of a broker.
You can as well buy the share straight from the company as they advertise or the open market. Irrespective of your method, you will still need the services of a stock broker to help you handle some transactions.
The stock exchange market can also help with the trading of your shares at a fee and commission. The fees involved are estimated using a unified standard sliding scale.
Do you want to buy shares in Nigeria; here is how to go about it.
- Opening a Nigerian Brokerage Trading Account
A Nigeria Brokerage trading account is an electronic account that must be open according to the directives of Central Security Clearing System (CSCS). The step involved in opening this account is straight forward. Your broker will give the CSCS account opening form and you will be provided with a CSCS account number. Your CSCS account number will be on the share or stock that you trade, allowing the CSCS to keep track on the records of all your holdings.
Documents needed for filling the form are as follow:
- Two colored passport sized photograph showing your face clearly.
- An authorized means of identification. This can be any ID issued by the government having an identification number. You can use your national ID card, driver’s license, as well as your international passport for this purpose.
- A duplicate of your recent utility bill. This is important because it will be used to verify your physical address. You can make use of your electricity bill or your water bill that is not beyond three months.
- The CSCS form will be submitted along with the account opening form, copy of your identification, your passport photograph, and a photocopy of your recent utility bill. These must be submitted to the broker and can be sent through email. You are also required to send the originals later.
- Funding Your Brokerage Account
Your account can be funded once it is opened. Your broker will provide you with the details of the account and you can easily fund it through wire transfer.
- Submitting a Trade offer
Before you finally decide to buy a share, you must carry out adequate research. The step you are required to take is to give your broker a set of instructions about the type and number of shares you want them to purchase on your behalf.
You should also be aware that Nigerian Stock Market are liquid, so it is imperative you have a price limit for any share you intend to buy in order not to over pay.