Nigerian Stock Exchange NSE – All You Need to Know

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Nigerian Stock Exchange NSE

The world of investing covers money, finances, bonds, securities, stocks, etc. The Nigerian Stock Exchange NSE, founded in 1960, has helped in better investment, better inflow and outflow, and instigates in the stabilization of country’s economy.

The stock exchange has assisted each investor to gauge success of his company by assessing investment opportunities that would facilitate steady growth for his company.

It is the member of the World Federation of Exchanges, and continuously strives towards creation of representative offices controlled by the state.

Though the NSE is a self-regulating body, it is under the surveillance of the Securities and Exchange Commission in Nigeria.

The NSE has supervised capitalization and burgeoning of economic growth in the country as well.

Currently, Nigerian stock exchange is operating Automated Trading System that has fostered the practice of algorithmic trading through which computers monitor the trades meeting certain important criteria.

Today, the various companies listed are majorly based out of Nigeria, and uses the Lagos timezone and does not adhere by the Daylight Saving Time.

Nigerian stock exchange market

Brief History of Nigerian Stock Exchange NSE

Founded originally as the Lagos Stock Exchange officially the operations commenced on 25th August, 1961.

Also Read: Why the capital of Nigeria was moved from Lagos to Abuja

Development has to be attributed to the way Nigerian market evolved after gaining independence from colonial rulers.

Primary objectives were to introduce revenue mobilization in the market, and taxation. Lagos Stock Exchange was primarily a private limited liability company till it opened with 19 listed securities for business.

The motto was to “supervise an even growth of Nigerian Capital Market“, and in 1977, Lagos was reformed as Nigerian Stock Exchange, its title conferred by the Indigenization Decree of 1977.

In the interest of small-scale business enterprises, the Second tier Securities Market was founded. From December 1977 onward, NSE has its branches in some of the well-known commercial cities.

Nigerian Stock Exchange has its trading floors in Yola, Kano, Port Harcourt, Kaduna, and Ontisha. Currently, the Nigerian Stock Exchange market is owned by banks and insurance companies.

NSE encourages foreign capital flow into the country and has even scraped off the legislation for the sake of it.

The main objectives of NSE today encompasses areas like:

  • Anticipating the different needs of the Nigerian economy to promote its development.
  • Requirements of the smooth functioning of the Nigerian Capital Market in relevance to the contemporary needs generating fresh rules to fuel market growth.
  • To maintain the strictures and law pertinent to Nigerian economy its needs in relation to the 21st century.

Also Read: What is NASDAQ and how it works

How the NSE Works?

The organization has implement Automated Trading System that allows traders exact rules to test them on data before putting the money.

Moreover, the system eliminates emotions out of the system and the trade entries are now dependent on the expertise of programmer.

How the NSE works

The software is linked to direct access broker with all the rules written in machine language. It operates on rules and regulations as laid down by the capital market and its different institutions.

National Exchange for Automated Trading (NEAT) is completely synthesized on screen by adopting the tenets of a more disciplined market.

NEAT has made the market easily accessible to the traders and act as a protective shield to curb the practices of over trading that are quite rampant these days.

Traders have the opportunity to evaluate the trading ideas in a synchronized manner. There are three market types-

  • Normal Market Odd
  • Lot Market
  • Auction Market

Also Read: 10 best investing books every young investor must read

Functions of Nigerian Stock Exchange

Ever since its inception in 1960, Lagos Nigerian Stock Exchange initially had 19 listed securities with 4 major companies acting as trading dealers.

A council was setup in that year as well. In contemporary times, its activities are supervised by state and the state sees that not a single violation of market rules disrupts the establishment.

Exchange work is easily facilitated by automation that daily publish information on the companies.

NSE furthermore provides a fair trading policy inside the system with detailed reports generated weekly, quarterly, monthly, and yearly.

Presently, Nigerian Stock Exchange has 13 functional branches in the country managed by representatives whose responsibility includes guaranteeing real time trade.

NSE has a steady flow of foreign funds managed by the state authorities. There are no restrictions imposed on foreign investors who are encouraged to invest in the NSE

Nigerian Stock Exchange Index

As per records, it is the largest stock index in Africa and tracks all the listed NSE companies. A record of A total turnover of 726.607 million shares of N10.459 billion in 12,915 deals took place this week.

NSE has 4,009 units of government bonds at a net worth of N4.11 million traded this week in 16 deals when compared to last week’s 8 deals as N20.049 million was transacted.

NSE Opening and Closing Bells

Nigerian Stock Exchange has no launch break and starts from 10.00 a.m. with its closing bells at 2.20 p.m.

Its daily schedule is listed as:

  • Monday – Friday 10:00-2:20 pm
  • Pre-trading Hours: 09:30-10:00
  • Post Trading Hours: 14:20-14:30

Nigerian Stock Exchange Market Capitalization

Here’s link to download the market capitalization of the NSE http://www.nse.com.ng/DownloadsContent/Market%20Capitalization%20for%2027-02-2019.pdf

Nigerian stock exchange fact book: http://www.nse.com.ng/market-data/other-market-information/nse-fact-sheet

Notable Dates in the NSE’s History

NSE’s official work was inaugurated on 1961.

In 1977, the organization was allotted the significance of Nigeria’s stock market and different subsidiaries were established in the cities.

In 1985, the Second-Tier Securities Market was established In 1985.

Customs Street was opened in Lagos at the presence of President Ibrahim Babangida.

The share index reached to the zenith of 1,000 mark in 1992.

In 1996, Nigerian Stock Exchange abolished the T+14 Settlement Period and instead opted for weekly Settlement Period.

President of the ASEA was elected by NSE in 1996.

In 2012, NSE initiated Lotus Islamic Index and X-Value.

In 2013, a new trading platform was brought by Platform X-Gen.

In 2014, Nigerian Stock Exchange was a part of United Nations Sustainable Stock Exchanges Initiative.

Also Read: What are public limited liability companies in Nigeria

Nigerian Stock Exchange NSE Summary

NSE is the 51st largest exchange and uses Nigeria Naira as its primary currency. Over the decades, NSE has worked with the latest technologies like electronically insinuated exchange with an automated order-driven trading system operated on screen.

Recently the Nigerian Stock Exchange has appointed Ujah Idibia as its Good Cause Ambassador to promote social development, eliminate drug trafficking, and get rid of other evils essentially detrimental to the development of Nigeria.

It has been enormously helpful to investors who want to satisfy their different data requirements. For a beginner, this website – Oasdom acts as a guideline to know in-depth about the ins and outs of the NSE market.

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