Nigeria Stock Exchange was founded in the year 1960 as the Lagos Stock Exchange with 19 securities listed for trading. Today there are 262 securities listed on The Exchange, made up of 11 Government Stocks, 49 Industrial Loan (Debenture/Preference) Stocks and 194 Equity / Ordinary Shares of Companies.
The Nigeria Stock Exchange took on its present name in 1977 as by then the Stock Market already had branches in the most important business centers of the nation. The six branches of The Nigeria Stock Exchange are :
- Lagos opened in 1961;
- Kaduna opened in 1978;
- Port Harcourt opened in 1980;
- Kano opened in 1989;
- Onitsha opened in February 1990;
- Ibadan opened in August 1990;
- Abuja opened in October 1999;
- Yola opened in April 2002.
Lagos however remained the headquarters of the Nigeria Stock Exchange.
The business of trading in Nigeria stock exchange Market is conducted during the weekdays from 11 o’ clock in the morning to 1 o’ clock in the afternoon local time. The goods, which are kept as security while trading are, corporate bonds, shares and government bonds. The trading of shares and bonds are done by the stock brokers in large halls by shouting out loud or by making phone calls which each branch having its own trading hall. The Nigeria Stock Exchange now uses an Automated Trading System which makes trading easier, faster and safer.
The Nigeria stock exchange was started with a small capital and in the year 1997 the capital went up to a total of about $ 3 billion. Nigeria Stock Exchange has been one of the most successful businesses in Nigeria.
The All-Share Index (AMI) is the stock market index of the Nigeria Stock Exchange which for its calculation uses only common stocks (ordinary shares), was developed in 1984.
Its market capitalisation was 5.12trillion naira at the end of 2006 compared to 2.9trillion the previous year.
Prices of new issues are determined by issuing houses/stockbrokers, while on the secondary market prices are made by stockbrokers only. The market/quote prices, along with the All-Share Index, are published daily in The Stock Exchange Daily Official List, The Nigerian Stock Exchange CAPNET (an intranet facility), The Nigerian Stock Exchange website (www.nigerianstockexchange.com), our stock update page, Newspapers and on the stock market page of the Reuters Electronic Contributor System.
In order to encourage foreign investment in Nigeria, the government has abolished legislation preventing the flow of foreign capital into the country. This has allowed foreign brokers to enlist as dealers on the Nigeria Stock Exchange and investors of any nationality are free to invest. Nigerian companies are also allowed multiple and cross border listings on foreign markets.
In the quest of attaining world standard in stock marketing, Nigeria stock exchange became member of the FIBV or “Federation of International Stock Exchange”. Also with the current fight for fraud and corruption, public trust in the Nigeria stock market has grown tremendously, with about three million individual investors and hundreds of institutional investors (including foreigners who own about 47% of the quoted companies) using the facilities of The Nigeria Stock Exchange. The Nigeria Stock Exchange’s 39-year history is devoid of any fraud, shocks, scandals or insider dealings.
The body that governs the Nigeria Stock Exchange is the Securities and Exchange Commission (SEC).
Clearing, Settlement and Delivery of transactions on The Nigeria Stock Exchange are done electronically by the Central Securities Clearing System Limited (CSCS), a subsidiary of The Nigeria Stock Exchange. The CSCS Limited (“the Clearing House”) was incorporated in 1992 as part of the effort to make the Nigeria stock market more efficient and investor-friendly. Apart from clearing, settlement and delivery, the CSCS Limited offers custodian services.
Charges included in all transactions are a 3% commission on the traded value of shares and a 1% Securities and Exchange Commission fee. Withholding tax on dividend and interest remains at 10%; corporate income tax, 35%, capital gains tax, 10%.
The Nigeria Stock exchange is presently headed by a Director-General in the person of Dr Mrs Ndi Okereke-onyiuke.
Every business has its hurdles, so does stock marketing. We won’t promise you a gold mine, but we assure you of a mine, dig well and you will find gold. The type of gold only stock marketing can guarantee.