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How to trade Stocks in Nigeria? A beginners’ guide | The Guardian Nigeria News – Nigeria and World News

The trend of stock trading has been steadily picking up throughout the world since the advent of electronic trading in 1970. In the past decade, there has been increased participation of the millennials in the Stock market through online trading apps like Robinhood and E-Trade which has given boost to trading figures.

The trend of stock trading has been steadily picking up throughout the world since the advent of electronic trading in 1970.

In the past decade, there has been increased participation of the millennials in the Stock market through online trading apps like Robinhood and E-Trade which has given boost to trading figures.

Nigeria too has seen growing interest in online trading with both millennials and older stock traders using local trading platforms.

But it has been noticed that many new traders generally tend to ignore the basics and risk factors related to trading while trying to book significant profits in turn they end up losing money. To make better profits, it is important to understand the details of the stock market and guidelines related to stock trading.

Below is our complete guide for the beginners to start stock trading in Nigeria.

What are Stocks or Shares?

A stock or share represents the ownership of the company or corporation. Owning shares of any company means that the shareholder owns a part of the company’s or corporation’s asset and earnings.

All the shares that are held by external investors of a company are called outstanding shares. Suppose if a company has 500,000 outstanding shares, then owning 50,000 shares means owning 10% of the stakes in the company.

Any company or corporation that exists in the world is either public or private. A private company is generally owned by a few individuals who can be founders, management, or private investors. A public company is a company in which common people or general public can own stakes besides the company promotors or founders – by buying a portion of shares offered in an initial public offering or through

Stock exchange.
For example, Aliko Dangote owns shares of Dangote Group, Elon Musk owns shares of Tesla. In simple terms, if you wish to own a part of any company, you will buy its shares.

The value of these shares keeps changing due to the performance of the company and many other factors. The frequent buying and selling of shares with an aim to book profit is called as stock trading. 
 
How Does Stock Trading Work?

The act of buying and selling of shares from stock exchange with expectations to book profit is called stock trading while accumulating the stocks for a long term is called stock investing. Traders who generally buy and sell the stocks on the same day are known as day traders.

A Stock exchange is a secondary market where all major shares of public companies are traded.

Exchange matches the potential buyers and sellers of shares of listed companies on the exchange. This means that if you buy shares of any company, you are buying from other shareholders who want to sell through the stock exchange.

For example – Tesla, Microsoft, Alphabet, Guaranty Trust Bank Plc are traded publicly on stock markets and investors can buy & sell them on exchange.

Only Public Companies are allowed to trade publicly on a stock exchange that means outside investors or general public can invest in them through stock market. This is a way for companies to raise capital for business expansion or raise initial funding in case of IPO. Every new company has to register itself through Initial Public Offering (IPO) on an exchange.

Investors normally earn income from company’s profits as dividends or by speculation on share value as day trading or value investing in the stock exchange.

Individuals can buy and sell shares of any listed company at varying prices from the stock market.

Companies are not allowed to take part in stock trading but they can buy back their own shares or issue more stocks.

There are different stock exchanges across the world. Some countries have multiple exchanges like US has Nasdaq & Dow Jones. Nigeria only has one stock exchange i.e: NSE (Nigerian Stock Exchange). There are total of 169 companies listed on NSE which have a market capitalization of ₦29.5 trillion as of 8th September 2020.

How can you invest in shares of a company?
The stock exchange connects buyers and sellers who want to transact for the same stock. The broker acts as middlemen between the stock exchange and buyer or seller and charges a commission for executing trades. While owning the stocks of any company, the individual has stakes in that company which is listed on the stock exchange.

People in Nigeria can invest in any Nigerian public sector company and can also invest in stocks of
foreign companies.

1. Buying Shares of Nigerian Companies on Nigerian Stock Exchange 
To buy and sell shares of a public sector company listed on NSE, you need to open a stock trading account from an NSE registered dealing broker. The process is simple and can be completed within 48 hours by filling basic details and providing the required documents.

Apart from the stock trading account or the brokerage account, you also need to have a Central Securities Clearing System (CSCS) account. The CSCS holds the records of ownership of each security in Nigeria. The CSCS account opening form is provided by the broker which needs to be filled and submitted along with the supporting identity proof documents.

Once a CSCS account is opened, A Clearing House Number (CHN) is provided which is unique for each registered portfolio. After opening both the accounts and submitting the required documents, retail investors can start placing orders through the broker to execute stock trading. 

2. Buying shares/stocks of Foreign Companies
As a share investor, you would like to invest in wide variety of leading companies. But the shares of foreign companies like Apple, Tesla, Microsoft, Google are not listed on NSE, so for this, you would normally need to open an account with a foreign broker like Robinhood, E-Trade but that’s not possible as most of these brokers don’t accept foreign clients.

However, several applications have been launched in recent years that allow traders in Nigeria to buy and sell stocks of foreign companies. Trove, Chaka, Bamboo, Wealth.ng, etc. are examples of the apps that allow foreign stock trading.

There also some forex brokers in Nigeria that offer CFD; Online Trading via their apps like Hotforex, ForexTime and some foreign CFD brokers like – Etoro, Avatrade, XM, Exness, IG that accept Nigerian clients. These brokers allow trading on foreign companies shares around the globe as CFD instruments and some even offer direct ownership of shares. However, it is important to note that CFD instruments have their risks and you don’t get ownership of shares.

Things to consider before trading shares online
For a convenient and safe trading experience, beginner traders in Nigeria should keep the following points in mind.

1. Risks and Risk Management
The stock market is uncertain and price fluctuations are completely random due to multiple reasons.
Each stock holds a different risk factor that must be analyzed and considered before executing the
trades.
The risk factor of the portfolio can be controlled by owning stocks of companies from different sectors.
The risk to reward ratio should also be checked before investing.
You should also learn about Risk management before investing – It is an act of identifying, controlling,
and mitigating possible risk elements. It could be achieved by using risk management tools offered by
brokers like Stock Loss.

2. Trading/Transaction Fees
A variety of stockbrokers are available in Nigeria and each of them charges different trading fees and commission. Before starting stock trading, it is important to understand about all the trading and non-trading fees that will be charged from the traders.

3. Information, Feeds and Data
The traders must have decent information about the stocks and should be able to compare every
available stock based on the available data. Traders can also create a goal-oriented strategy to trade based on the graphical data of previous price movements. Overvalued stocks should be avoided while undervalued stocks with possible upward movement should be preferred. This information is available as market feed and in data form at most brokers.

4. Investing Education and Following Others Advice
Traders should try to learn about the basics and strategies of investment before actually executing one.
Knowing the market trends, price swings, major news that can trigger price movement can play a crucial role in turning losing trades into profitable trades. Traders should not blindly follow others and should
use their own analysis to avoid severe losses.

5. Practice with Virtual/Demo Account

It is better to learn the basic terminologies and investment strategies through a demo trading account with virtual money. This will help you check the suitability of the selected stocks and investment strategy with your trading goals and objective without losing any money.

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Donald Trump blasts ‘fools’ who oppose good Russian ties

US President-elect Donald Trump has posted a progression of tweets censuring the individuals who contradict great relations with Russia as “‘dumb’ individuals, or nitwits”.

Mr Trump promised to work with Russia “to comprehend a portion of the numerous… squeezing issues and issues of the WORLD!”

His remarks came after an insight report said Russia’s leader had attempted to help a Trump race triumph.

Mr Trump said Democrats were to be faulted for “gross carelessness” in permitting their servers to be hacked.

In a progression of tweets on Saturday, Mr Trump said that having a decent association with Russia was “no terrible thing” and that “lone “idiotic” individuals, or simpletons, would believe that it is awful!”

He included that Russia would regard the US increasingly when he was president

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Bulls and Bears Took on More Currency Exposure in Week Through January

he most striking improvement among theoretical situating toward the finish of a year ago and the primary session of 2017 is not that modification were little. There was just a single gross theoretical position modification of more than 10k contracts. With sterling apparently not able to maintain even humble upticks, the bears added 13.1k contracts to the gross short position, lifting it to 120.2k contracts.

Or maybe, it is eminent that examiners for the most part added to positions, long and short, as opposed to close positions at the very end of the year. Examiners added to net long outside cash prospects positions, aside from in the Japanese yen and Swiss franc where 2.6k and 2.5k contracts were exchanged separately. Examiners likewise added to gross short positions. Here there was just a single exemption, the Japanese yen. Despite the fact that the dollar shut comprehensively higher in front of the end of the week, every one of the monetary forms we track here, spare the Mexican peso, picked up against the dollar in the three sessions since the finish of the CFTC reporting period.

Every once in a while it is helpful to review why many market members take a gander at the theoretical situating in the cash fates advertise. It is not that the outside trade is essentially a prospects showcase. It is principally an over-the-counter market in which every day turnover midpoints in abundance of $5 trillion a day.

Trade exchanged monetary forms and alternatives represented around 3% of the normal day by day turnover as indicated by the BIS study. Be that as it may, past reviews have discovered some contemporaneous connection between’s market heading and net position changes. We think it additionally offers knowledge into a specific market section of pattern supporters and energy brokers. It is not by any means the only device, yet one of a few data sources.

One ramifications of this is albeit theoretical positions in the money fates market are moderately extensive, it is still little contrasted and the money showcase. Along these lines, it is difficult to see the genuine essentialness of a record vast position, as though there is some market top. At some point, examiners are not driving the costs, possibly there is another fragment, national banks, enterprises, as well as genuine cash that is more essential at any given minute.

We invest some energy taking a gander at gross positions instead of just net theoretical positions, which is the more customary approach. We think a more granular look is frequently fundamental. There is a distinction between short-covering, for instance, and new purchasing, however it appears to be identical in the net. Additionally, the gross position is the place the introduction is not the net position. A net position of zero does not mean the market is nonpartisan. Net positions could be huge, which implies a short press or a negative stun could in any case troublesome. The positions that must be balanced are captured in the gross measure not the net figure.

We find numerous customers are likewise keen on theoretical situating in the US Treasuries and oil. The net and gross short theoretical Treasury position has swelled to new records. The bears added 23.8k contracts to the as of now record net short position, lifting it to 616.2k contracts. The bulls attempted to pick a base and added about 20k contracts to the gross long position, which now remains at 471.2k contracts. These modification prompted to a 3.8k contract increment in the net short position to 344.9k contracts.

The bulls delayed in the oil prospects toward the finish of 2016. They exchanged short of what one thousand contracts, leaving 608.1k gross in length contracts. The bears added 4.1k contracts to the gross short position, giving them 168k. These conformities trimmed the net long position by very nearly 5k contracts to 440.1k.

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3 ways to profit in the ‘year of the dollar’

In December, the Federal Reserve raised loan fees for the second time since the Great Recession and included the desire of a 2017 financing cost climb to its gauge. Furthermore, only a couple days prior, the abundantly anticipated minutes from the most recent Fed meeting demonstrated the most hawkish tone from the national bank in two years.

In the meantime, Europe has been dove into political turmoil after a year ago’s Brexit vote and the later abdication of Italy’s leader. Somewhere else, the Bank of Japan proceeds down the way of negative rates and forceful security purchasing.

Put it all together, and it isn’t astounding that the U.S. Dollar Index is up against 14-year highs.

Speculators may have missed so much discussion on account of babble about the Dow Jones Industrial Average at the end of the day almost hitting 20,000. Be that as it may, paying little respect to your assignment to stocks or your venture skyline, this sort of huge picture incline in the dollar implies right now is an ideal opportunity to position your portfolio to benefit and, maybe most critical, to keep away from a portion of the pitfalls that can originate from a solid local cash.

Here are a couple ideas dollar exchanges ought to consider:

Residential plays over multinationals

There’s a considerable measure of seek after shopper stocks in 2017 on account of an enhancing work market and any desires for a jolt under a GOP-controlled Congress and President Donald Trump. In any case, remember that not all retailers are made equivalent especially those with abroad operations that are adversely affected by the wide dissimilarity in monetary standards at this moment.

For example, retailer Wal-Mart Stores Inc.(WMT) said troublesome money trade rates shaved very nearly 2.5% off profit for each partake in the second quarter of 2016. On the other hand consider that in the monetary final quarter of 2016, athletic attire goliath Nike Inc.(NKE) saw its income development cut down the middle because of forex weights, from 12% year-over-year in consistent cash measures to only 6% including real money changes.

To take advantage of the “reflation” exchange that numerous financial specialists are counts on in 2017, you need to represent the headwinds that a solid dollar are making for multinationals at this moment. The most ideal approach to do that is to consider customer plays that do by far most of their business here in the U.S. – for example, Foot Locker Inc.(FL), which has been an uncommon splendid spot in retail throughout the most recent couple of years.

Supported money ETFs

Obviously, in the event that you need a steady portfolio, you can’t just purchase just local centered values. Geographic expansion is similarly as imperative as enhancement crosswise over parts and resource classes. Such a large number of financial specialists keep on holding worldwide plays in light of a legitimate concern for a balanced portfolio, regardless of the possibility that it implies battling a daunting struggle as a result of a solid dollar.

The uplifting news, notwithstanding, is that you don’t need to leave yourself to torment through a solid dollar and a powerless euro when you put resources into Europe. Nor do you need to stress over the yen-dollar conversion standard when you put resources into Japan. That is on account of there’s an entire group of cash supported ETFs to permit financial specialists to put their cash in outside business sectors yet keep away from forex issues.

Consider that Japan’s Nikkei 225 file is up around 25% from its July 2016 lows. The WisdomTree Japan Hedged Equity Fund(DXJ) is up 35% in a similar period on account of assurance from forex issues and a somewhat better-performing rundown of stocks – while the non-supported iShares MSCI Japan ETF(EWJ) is up only 10% in a similar period because of battling a difficult task against a solid dollar.

In the event that you need to differentiate your portfolio comprehensively, you ought to consider supported assets that incorporate the Japan-centered DXJ, the WisdomTree Europe Hedged Equity Fund(HEDJ) to play Europe or the iShares money Hedged MSCI EAFE ETF (HEFA) for developing markets.

Dollar list ETF

In the event that you are searching for an immediate play on a rising dollar as opposed to putting resources into stocks, figuring out how to exchange remote trade can appear like an overwhelming undertaking. Gratefully, there’s the PowerShares DB US Dollar Index Bullish Fund(UUP).

This ETF is attached to the U.S. Dollar Index, which is a measure of the greenback against a wicker container of other worldwide monetary standards including the yen and the euro. It’s a straight money play, however that doesn’t make it straightforward or hazard free. In the event that the dollar debilitates, you’ll lose cash similarly as though you’re putting resources into a stock that has fallen on difficult circumstances. Furthermore, obviously, PowerShares takes a little cut of your speculations en route that indicates 0.8% yearly, or $80 a year on each $10,000 contributed.

Still, in the event that you need to conjecture on the dollar or support against a solid U.S. cash keeping down other worldwide ventures on your rundown, it’s maybe the least demanding approach to do as such for generally financial specialists.

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