Investing In African Stocks Like The Nigeria Stock Market
African stock markets are growing by leaps and bounds. Some parts of Africa, like the Johannesburg Stock Exchange (JSE) of South Africa and the North African stock exchanges, have been doing fairly well for a while now. But the greatest areas of growth are in the Sub-Saharan African stock exchanges, like the Nigeria Stock Market. Not all of the African stock exchanges are doing well, but there are a few that deserve notice. Some countries have challenges that make it difficult for them to consistently handle the growth of a stock exchange. Each individual country even varies in the options that you have by which to purchase shares from that country. However, with the rapid growth in revenues of some corporations that are based in Africa or have branches in Africa, it is worth it to take the time to learn how to select the best investments.
There are only a few African stock exchanges that are worthy of consideration. Some have been having some stellar months lately, while others have been doing well for awhile now. A few need more time to develop the infrastructure to handle the growth that stock investing brings. Sub-Saharan Africa is seeing the greatest amount of growth. The stock-exchange indices for the Nigeria Stock Market and for the Nairobi Securities Exchange in Kenya have seen the greatest amount of growth over the past three years.
However, the top African stock exchanges have varied greatly over the years, depending on which factors one is evaluating. Some may not have done as well last month, but when you look at their performance over the last three years, you can see the growth. As of April 2013, the Johannesburg Stock Exchange (JSE) has the highest weekly trade volume, followed by the Nigerian Stock Exchange, and the Nairobi Securities Exchange. Just because an exchange is trading a lot of volume, doesn’t mean that it is the most profitable for its investors. The three highest performing stock exchanges over the last year are the Ghana Stock Exchange, the Uganda Securities Exchange, and the Nairobi Securities Exchange again. This means that these exchanges were the most profitable for its investors as compared to all of the Sub-Saharan African stock exchanges.
African stock markets have obstacles that they have to face that larger markets have already handled. For example, African stock markets are small and are dominated by only a few large corporations. In some cases, one company can own 30% of the all the shares that are available for trade on the entire exchange. Another issue is that trading does not occur as frequently. So the pace of trading shares may not be as rapid as it is in the United States. Yet a third obstacle that African stock exchanges have to face is that not everyone has full access to technology. This means that some exchanges may not have a website, or the website may not always have current information on it. Also, trades may be done manually in these cases. Finally, Africa is short on both savings and capital. This means that the integrity of the trade may be a concern.
In spite of these challenges, there is a lot of money to be made by investing in African stock markets like the Nigeria Stock Market. If you decide to purchase some shares, the first thing you will need to do is find a reputable stockbroker. This is best done by referral through someone you trust or a large bank in the country in which you want to invest. Depending on your budget, you will also need to find out what is the minimum amount of funds that the stockbroker will accept as an initial investment. Once you have selected a stockbroker, the next step is to open your account and purchase your first shares. Each stock exchange will vary in the methods that are available to accomplish this. Finally, you can ask your stockbroker to have your dividends deposited directly into your trade account. This will make it much easier for you to access your funds.
Investing in African stock markets like the Nigeria Stock Market can be a risky endeavor. However, if you choose wisely, there are several African exchanges that are worthy of further research and consideration. This will give you an opportunity to generate additional income, replace your income, or plan for your retirement. Make sure not to invest more money than you can spare; at least until the stock exchange in the country in which you would like to invest has stabilized. Once you have selected an African stock exchange, like the Nigeria stock market, the steps to begin investing are fairly straightforward.
Want free Audio books? Get one of my Audible Audio books of your choice for free. Click Here
Browse my Google Playstore Books