The Best and Most Surefire Way of Building Wealth in Troubled Times
If you are looking for a surefire way of building wealth in an economically troubled world, you might want to take a look at the Nigerian Stock Exchange (NSE). Before you dismiss the NSE, here are some interesting facts about it.
The NSE started out as the Lagos Stock Exchange in 1960. This was a tumultuous year for Nigeria as this was when it gained its independence. The newly founded exchange started operations in 1961. It operated as the Lagos Stock Exchange until December 1977 when it became the Nigerian Stock Exchange.
By the end of 2012, the Nigerian Stock Exchange had about 200 listed companies with a market capitalization in the $57 billion range.
The Nigerian inflation rate averages 10.7% with a record low of 3% mid-2006 and a record high of 15.6% in February 2010.
Nigerian Stock Market and Credibility
There is something that must be addressed and that is the concept of the Nigerian scam. While it might seem inappropriate to mention these scams in an article about the Nigerian stock market, the association of Nigeria with the scams, also known as Nigerian 419 scams, needs to be addressed. The reality is that the scams are not exclusive to Nigeria. Actually the leading countries involved in this particular type of fraud are the United States and the United Kingdom, followed by Nigeria.
In addition, there is another problem that Nigeria faces and that is the chaotic government situation and the business impact of the economic deal with Shell. The general public tends to think of these images when they think of Nigeria because the usual source of information is a new byte or some quick mention in social media. Nevertheless, in spite of the troubles the country has faced since its independence, it is achieving stability and having confidence in Nigeria is a positive approach to successful investing.
The Nigerian Stock Exchange
With a history that is as old as the liberated country is, the Nigerian Stock Exchange combines the best of African enterprises with the global investor community. It is regulated by the Securities and Exchange Commission (SEC). The SEC carries out surveillance on the exchange as it does for other similar exchanges. This ensures that market rules are followed and the global standards for trading practices are maintained.
The Nigerian Exchange is an affiliate member of the World Federation of Exchanges (FIBV) and an observer at the International Organization of Securities Commissions (IOSCO). It is a foundation member of the African Stock Exchanges Association (ASEA) and a member of the Commonwealth of Nations.
The Nigerian Stock Exchange uses an Automated Trading System (ATS). The system was instituted on April 27, 1999 and it allows dealers to trade on a monitored network. This means that they can carry out remote trading. There is a head office in Lagos and thirteen branches throughout Nigeria. More branches are being added.
Company performances are published daily as well and weekly, monthly, quarterly and annually. Trading begin at 9:30 a.m. and closes at 2:30 p.m. on every business day.
Country Support for the NSE
The Nigerian government abolished legislation against foreign capital coming into the country. This was a move designed to attract foreign investment. Because of this opening of the financial doors to the country, foreign brokers are able to become dealers on the Nigerian Stock Exchange. As well, investors from any other country are able to take advantage of this golden opportunity to invest. Nigerian companies can have multiple and cross border listings on foreign markets.
As for Nigeria, after its independence in 1960 it became involved in a civil war with Biafra which was also struggling for independence. Since its independence the government has been a military government sometimes and a democratically elected government other times.
It is also Muslim in the north and Christian in the south and since 2002, there have been clashes between the government and the militant jihadists in the north. Nigeria is the most heavily populated African country and the seventh most heavily populated country in the world.
The government is wealthy due to its oil reserves. In 2005, the Goldman Sachs investment bank chose Nigeria as one of the N-11 countries. N-11 refers to the eleven countries that were viewed as being most likely to become the largest economies in the world. The investment bank came to this conclusion based on the following criteria: trade and investment policies, political maturity, macroeconomic stability and education quality.
Ripe for Investing
The government of Nigeria works closely with the Central Bank of Nigeria to establish strong money and equity centers and to develop the securities regulatory board and treasury instruments. The Central Bank is successful thanks to the framework established and the increasing value of Nigeria’s primary product, crude oil. The Nigeria Stock Market (NSE 30) is currently performing at an all time high.