There is a popular saying in the investment world. The higher the risk, the higher the return.
You might be wondering; how do I go about getting this high return? The solution is the equities market.
In December 2021, a multi-national firm offered some shares to the public for purchase, but most of potential investors did not know how to go about buying the shares. They were confused about the whole process. They did not know who to talk to, what to read, etc. They all just wanted a slice of the cake. Some people eventually missed out on the opportunity because of lack of knowledge.
I would like to bridge that knowledge gap by educating you on how to buy your first shares on the Nigerian Exchange.
Before you can invest in equities you must go through a licensed Stockbroking firm. A list of registered brokers can be obtained from the Nigerian Exchange website or the Securities and Exchange Commission website.
Once you have selected the brokerage firm you intend to deal with, you can start the conversation by sending an email to their registered email address or website.
It is important to visit the website of the registered firm to know the people behind the organisation. It is important that you do your due diligence before selecting the firm. You also need to check if they have the required capital to run their business.
Once you are done with that, I advise that you visit the firm. It is better if you know where they are located. Putting a face of the people behind the business or the account officer. Remember, you are intending to part ways with your hard-earned funds.
The brokerage firm will task you to fill out their account opening documents. This can be done either in paper form or online. Once that is done, they will request for Know Your Customer documents.
These documents are
- Govt approved Identification Card
- Passport Photograph
- Current Utility Bill
These documents will then go through the process of verification. The compliance department needs to make sure that the information presented on both the forms and KYC documents is genuine.
Once the information has been verified, a trading account and an in-house account will be opened for you. A trading account will be opened with CSCS (Central Securities Clearing System) while the in-house account will be opened with a brokerage firm. This process is usually done within Forty-Eight hours. Once the account has been opened with CSCS, an email will and be sent with the details of your CSCS account.
The email states your account details which are 1. Trading account and the Clearing House Number)
The trading account is peculiar to the brokerage firm you have selected to use. The second number is the Clearing house number . This number is a unique identifier in the stock market. It is used to link all your trading accounts that you have running with different brokerage firms. This information is for those who intend to operate more than one trading account number.