How To Buy Stocks In Nigerian Banks ; It is no news that the banking sector is a fertile ground for value investors. And equity ownership in such a venture is a great way to leverage long-term investment opportunities. However, worthy to note also, is the fact that like crypto, bank shares can be pretty volatile, hence, accurate timing is paramount. An investor must know that while buying shares is one of the best ways towards wealth creation, shares do not have fixed value depth, hence examining the market, exploring available stocks, and playing safe is essential.
The above explanation is a broader perspective of the modus operandi as it pertains to the worldview of buying bank shares in the world at large. The article narrows it down to buying bank shares within the Nigerian banking system.
Buying Shares In The Nigerian Banks; What You Must Know
Firstly, in the course of trying to buy Shares in any Nigerian bank, you’ll certainly be faced with the “stock” term. Don’t be confused, it simply connotes equity too; it’s the percentage of the ownership of a corporation, in this case, the bank.
Now, the concept of “stock” splits into two sub-concepts; growth stock and value stock. Jumping in on buying bank shares without understanding these would result in investment fatality.
Growth stocks, as it pertains to the banking system, are banks with high growth potential, which can have them outperform the overall market owing to their future or long-term value. Value stocks on the other hand are banks whose current trading is below their current worth, thus, having a high chance of providing a superior return.
In all, understand the exact type of shareholder that you are; are you a trader or an investor? If you’re looking at trading, that’s an entirely different bucket of fish. If you’re an investor, then you must be big on fundamental analysis.
Here’s how to buy stocks in Nigerian Banks
Firstly, you must know the right place to go for information. Get to the Nigerian stock exchange website, there’s a section tagged “data” therein, clicking on it takes you to “corporate action” which further opens you to a list of all the declared dividends so far from a list of banks, ranging from Zenith bank, UBA, GTB, etc.
Tapping on any of the aforementioned banks brings you to the particular stock profile of choice. You can, from there, access its financial statement dating to as far back as possible, to give you a chance of deep evaluation. Upon finalizing your analysis, proceed to buy the stock (shares) in your bank of interest.
Choose a brokerage
Create an account with a brokerage firm that has a sound reputation. This firm stands as your linkage to the stock market you’re about to get into.
2. Create an investment plan
Before making any stock purchase, it is paramount to meticulously square out your investment objectives. Know that no matter how promising a bank share might seem, individual shares if bought in large quantities, can be very risky in case of a market downturn.
The question that must be satisfied is: “Does this bank have a history of price volatility?” If yes, then you may want to reconsider your investment strategy. However, this doesn’t always mean that past performances are determinant of future occurrences. Nevertheless, be on the safer side. Always. You must conduct healthy due diligence and exercise a rich dose of prudence.
Decide the amount and get an ID
Decide the amount you wish to invest, do you want to purchase a complete share or a fraction of it? What are your priorities? Ensure to make a good analysis of your scale of preference. Know that regularly, stocks are usually purchased on a fixed dollar amount. After then, you can make a deposit which would fetch you a trade number to serve as identification on the Nigerian Bank stock exchange.
Since the financial world is a married home, there’s a chance that you’re looking at investing in crypto as well. That’s if you’re not already into it. In the crypto world, leveraging the right facilities for different causes is essential. And as it pertains to converting crypto to cash, Dart Africa is one of the leading conversion platforms with a good sign-up rate in the past few years. All thanks to its speedy payment time, juicy rates, sound customer support service, low charges, and an overall user-first system. Many reports on review websites spell out the excellence of its reliability level and sound functionality. This is also seen on playStore.
Getting a positive turnout of events on buying bank shares in Nigeria would very much stem from understanding the technical know-how of how the stock market works, especially as it relates to the specific bank you wish to have a share in. In all, it balls down to doing due diligence; seeking guidance from professionals, and playing the ideal route.
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