Finance

Functions of the Nigerian Stock Exchange

Functions of the Nigerian Stock Exchange: Without a question, the Nigerian stock exchange is a significant contributor to the Nigerian economy.

The number of investors continues to grow. The Nigerian stock exchange, in its simplest form, is a marketplace. This is where you buy and sell stock. Here, people trade stocks and securities.

Functions of the Nigerian Stock Exchange

The objective is to buy equities at a discount and sell them at a profit when they increase significantly. Information is critical for investors to determine which stocks to buy and when to sell them.

Numerous elements, including the stock’s history, perception, cost, and quality, can all play a role in selecting which stock to buy or sell at any given time. After purchasing, the stock trader must hold onto the stock until it appreciates significantly in value.

What functions does the Nigerian stock exchange perform? They are addressed in greater detail below.

Read also: 10 Critical Points to Consider When Choosing the Best Forex Broker in Nigeria

The Nigerian stock exchange provides a medium for investors in the Nigerian stock market to use their disposable income to purchase products (stocks and securities) in the expectation that their value will increase in the future.

The Securities and Exchange Commission regulates them. This regulatory organization is charged with the responsibility of supervising the activities of the Nigerian Stock Exchange. This contributes to the prevention of market rule violations. Additionally, it assists in detecting and deterring unethical manipulations and trading behaviors.

The Nigerian Stock Exchange’s operations are automated. They publish performance data for firms listed on the Nigerian Stock Exchange on a quarterly, monthly, weekly, and daily basis.

The Nigerian Stock Exchange began operating its automated trading system in 1999. The device enables dealers to monitor market activity without physically visiting the Nigerian Stock Exchange. Many individuals who trade in the stock market do it directly from their offices.

The Nigerian Stock Exchange now operates 13 branches throughout the country and plans to expand in the near future. They begin trading at 9:30 a.m. and close at 2:30 p.m. Monday through Friday.

The Nigerian government repealed the legislation that had prohibited foreign investors from operating on the ingrain stock exchange. This allows for the listing of international firms on the Nigerian Stock Exchange, allowing Nigerians to invest in them.

Read also: How to Invest in Nigeria’s Stock Market: A Step-by-Step Guide

In 1993, the government deregulated the Nigerian Stock Exchange. This means that stockbrokers and issuing houses now control the prices of issues. Stockbrokers alone control the secondary market’s prices.

The following are some of the additional functions of the Nigerian Stock Exchange.

  • They provide an open marketplace for individuals to purchase and sell securities.
  • They enable businesses to raise capital.
  • They contribute to the country’s economy’s liquidity management by facilitating the purchasing and selling of all forms of assets.
  • They safeguard the public against unethical behavior and dubious activities by establishing guiding norms.
  • They make it easier to transact in government-owned securities.
  • They incentivize people to save.
  • They serve as a conduit for information dissemination to investors and manufacturers.

Have you considered making a stock investment?

To purchase shares, you must, however, have working money.

Stock Brokers are responsible for purchasing shares, as they have been permitted to do so by the Nigerian Stock Exchange (NSE). As a result, you must first decide on the type of shares you wish to purchase before selecting a broker.

You can purchase shares directly from a firm during their advertising campaign or on the open stock market.

Whichever option you pick, you must go via a stockbroker who will handle all of your transactions.

Stock Brokers will trade your shares for a charge and commission. Fees are set in accordance with a standardized sliding scale and are consistent across all brokers.

This is a step-by-step guide on how to invest in Nigerian stocks. Click here 

However, this article has been helpful with the information needed regarding the functions of the Nigerian Stock Exchange

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