• Who is a stockbroker?
• What is an Issuing House?
• What are securities?
• What are stocks and share?
• What are bonds and debenture?
• Who is an investor?
• How are stock and shares bought on The Stock Exchange?
• Who should buy shares?
• With how much money should I venture into stock market?
• Can shares be transferred?
• Which stock should I choose
• What are script or bonus shares?
• What does “Xsc” mean?
• How are any of these securies bought?
• What is the evidence of purchase of shares and stocks
• What does a Stockbroker charge for his services?
• What does an investor gain by buying shares?
• Can an investor come to buy and sell on The Stock Exchange?
• What other services do stockbrokers provide?
• How are the activities of the Stockbroker controlled?
• Why are Stockbrokers’ activities regulated?
• How are the current prices of securities traded on The Nigerian Stock Exchange Market known?
• Who do I approach when I have problems with a share certificate or dividend
• Who is a registrar?
• What are duties of a company Registrar?
• What is the Second Tier Securities Market (SSM) and how is it ?different from other Securities listed on The Stock Exchange?
• How much can a company raise through SSM?
• What percentage of shareholdings can an individual own under the SSM?
• What is the relationship between Investor and Stockbroker?
• What is CHN?
• What is CSCS?
• Why should I invest in the Nigerian Capital Market?

What is A Stock Exchange?
A Stock Exchange is an organised market where large and small investors alike buy and sell through stockbrokers, the stock and shares of Companies and government agencies. The stock exchange provides the essential facilities for companies and the government to raise money for business expansion and development projects through investors who share the corporations for the ultimate economic benefit of all Nigerians.

Who are the owners of the Nigerian Stock Exchange?
The owners (shareholders) of the Nigerian Stock Exchange are financial firms and institutions. In exceptional cases, individuals with integrity and experience in finance and business are also accepted as shareholders.

How does a person apply for membership of the Nigerian Stock Exchange?
Application is made on behalf of an applicant, by two persons who are already members of the Nigerian Stock Exchange, one of whom must be a Council Member.

How is The Nigerian Stock Exchange Governed?
It is governed by a team of shareholders elected at an Annual General Meeting. The council is presided over by a President and the administration by the Director General.

What are the Duties of the Council?
i. Makes policies
ii. Enforces discipline among members
• Makes Rules and Regulations for dealing members (Stockbrokers)
• Grants quotation and listing for securities
• Protects the interest of the investing public.
• Considers complaints about and among the members.

How do I get in touch with The Nigerian Stock Exchange?
You can write or visit The Nigerian Stock Exchange at their Head Office in Lagos. The address is as follows:
LAGOS
The Nigerian Stock Exchange
Stock Exchange House
2/4 Customs Street (8th & 9th floor)
P. O. Box 2457, Lagos
Tel. 2660287: 2660305: 2660335
They can also be reached at any of their branches in Kaduna, Port-Harcourt, Kano, Onitsha, Ibadan, etc. You can also visit their website at: www.nigerianstockexchange.com

Who are the principal Agents of The Nigerian Stock Exchange?
They are Stockbrokers and Issuing Houses

Who is a Stockbroker?
A firm or a person who buys and sells securities on behalf of investors for a commission called “brokerage”. The commission charged is regulated by The Stock Exchange.

What is an Issuing House?
As a member of The Stock Exchange, it is a merchant bank or a dealing member that helps to prepare prospectuses, to sell new securities offered to the public by Companies and governments.

What are Securities?
Securities are written or printed financial documents by which the claims of holders in specified property are secured. They could be stocks, shares, bonds and debentures traded on a stock Exchange.

What are Stocks and Shares?
Stocks and Shares represent ownership interest in a business.

What are Bonds and Debentures?.
They are other kinds of securities. They are legal documents representing a promise by the company or by Government (in case of a bond) to pay back a loan plus certain amount of interest over a definite period of time.

Who is an investor?
A person or an institution who uses his savings or borrowings to buy securities.

Why do people Buy Stocks?
To share in the fortunes of Nigerian Business. Some people buy stocks with the hope of seeing her capital grow; but keeping pace with inflation has always been the investor’s primary objective.

How are stocks and shares bought on The Stock Exchange?
Stocks and Shares are bought and sold on The Nigerian Stock Exchange through Dealing Members known as Stockbrokers.

Who should buy shares?
Anyone who is 21 years and above, qualifies to buy shares in Nigeria. Parents who may want to buy shares for their children are supposed to buy such shares in their own names and later transfer them to the children when they attain the legal age of 21 by nominal transfer.

With how much money should venture into the Stock Market?
Most income levels can venture into stock market. Some wealthy people and institutions invest thousands or even millions of naira but lower investors can participate with as little as fifty naira.

Can shares be transferred?
As stated above, an investor may transfer part or all of his shareholding to a relation, wife, son, daughter or brother etc. Where they all bear the same surname the transfer is known as Nominal transfer. However, it is also possible for an investor to transfer some or all his shareholding to a daughter who has got married or even his son-in-law. To effect this transfer, the investor should contact a stockbroker. Even in the case of a dead shareholder his shares can be transferred to his children or sold as the case may be.

Which stocks should I choose?
That depends on what you want from your investments. The stocks quoted (or listed) on the Stock Exchange range from Government stocks to ordinary shares and their dividends vary from low to high. The important thing is to determine your own objectives first, discuss with a stockbroker and then invest accordingly.

What does “XD” means?
It is a financial expression for “without dividend”. A stock that is purchased during the “without dividend” period will not earn a dividend declared in that period for its new owner.

What are scrip or bonus shares?
These are new shares made fully-paid by the capitalisation of reserves and allotted free of charge to ordinary shareholders in proportion to their existing holdings. In this process, fractions of shares sometimes arise and are often aggregated and sold, after which a cash payment in respect of the fraction is made to every shareholder entitled to it.

What does “Xsc” means?
It is a financial expression for “without the scrip” A stock that is purchased during the without the scrip period will not earn scrip declared in that period for its new owner.

What is Rights Issue?
When a company requires additional funds, it may obtain these either from the public large or from its existing shareholders. In the case of rights issue, such funds are obtained by an issue of share for cash to ordinary shareholders in proportion to their existing holdings unless shareholders at the General Meeting agree otherwise. Such shares are usually bought at less than the current market price. ‘Rights’ therefore refers to the entitlement of the existing shareholder to participate in a new issue.

What are Ex-Rights?
Ex-Rights refer to shares not having the benefit of an impending Rights issue.

What is the Proof of the ownership of shares or stock?
A certificate with the owner’s name and the number shares written on it. However, with the advent of the Central Securities Clearing System (CSCS), a Statement of Stockholding could be obtained from the CSCS.

How quickly are Share Certificates obtained after shares are purchased?
It depends on the mode of purchase. If purchased through public issue, it takes time (minimum of 3 months). However, if bought through the Secondary market (on the Floor), a Statement of Stockholding can be obtained after 3 days of purchase (T + 3).

What is the evidence of the purchase of shares/stocks?
If purchased through public offer, a receipt is usually issued by the receiving agent (bank/stockbroking firm, etc.). If bought through the secondary market, the Stockbroker issues a Contract Note.

What does a Stockbroker charge for his services?
A stockbroker charges a commission called Brokerage. The charges vary depending on the kind of services provided. However, charges by stockbrokers are regulated the Council of The Nigerian Stock Exchange.

What does an investor gain by buying shares.
• Dividend which is part of company’s profit.
• Bonus shares i.e. extra shares paid out of reserve which are distributed to existing holders.
• Capital appreciation as market prices of shares increase.
• Right to attend meeting of shareholder and participate in its deliberation as voting members.
• Use of shares as collateral for banks borrowing.

Can an investor come to buy and sell on The Stock Exchange?
No. He can only do so through stockbrokers who are licensed to represent investors and trade daily on The Stock Exchange.

What other services do Stockbrokers provide?
Provide professional advice on the selection and management of stocks.

For further enquiries, contributions and/or questions, please contact:
Godfrey O. Acho
Maninvest Asset Management Limited
EleganzaBiroPlaza (6th Floor)
Plot 634, Adeyemo Alakija Street; Victoria Island, Lagos.
Phone: 01- 2703508 (Office); 0803-307-8657, 01-8949057 (Mobile);