The Nigerian Stock Market and You: The Smartest Ways to Play

Almost everybody wants to make money in the stock market. But lack of knowledge of what it takes to be successful in stock investing has discouraged many people from fulfilling their investment and financial aspiration. It is therefore imperative to X-ray this text entitled “The Nigerian Stock Market and You: The Smartest Ways to Play” to offer necessary guide to such people.

It is written by Moses Onyebuchi, a stock market analyst and inspirational speaker who has the vision of teaching people success principles that will guarantee enduring achievement in life. Onyebuchi is a graduate of Economics from the University of Nigeria Nsukka (UNN), Nigeria and offers financial and investment advisory services.

According to Onyebuchi, this book has been written to liberate investors from financial bondage. He says it is important in stock investing that investors have a clear understanding of what they are doing with their money. It is those investors that really do their homework that succeed as successful investing requires time, starting capital, knowledge and skill; and determination, educates Onyebuchi.

He advises that for you to gain an edge over other investors, you must read stock investing books. The author stresses that you do not have to wait until you have a lot of money or the market is bullish before you read about the stock market. Onyebuchi says sometimes the best time to study the market is when no one else is interested.

The author assures that this book is rich in quality information that will transform your life, beginning with the overview of the Nigerian capital market, the operations of the market, the guiding rules to investing in the capital market, successful investor secrets, common investor mistakes, etc. He expatiates that the book has specific objectives of providing salary earners with an additional source of income; guiding retiring employees on stress-free and high-return investment options; disclosing ways of responding to changes in the Nigerian stock market, etc.

The book has 12 chapters. Chapter one is christened “Overview of the Nigerian stock market”. According to Onyebuchi, the Nigerian stock market is a specialised market where shares are bought and sold; a market where long-term funds are sourced through equities and debt instruments. He says these instruments are subsequently traded openly in the stock market and they include shares, bonds, industrial loans, derivatives, etc.

This author educates that the Nigerian capital market is divided into primary and secondary markets. The Nigerian primary market, according to Onyebuchi, is that which secures funds for the initial issuers of shares. That is, the market provides an avenue for companies seeking fresh funds to raise such with the aid of an application form issued by the issuing house on behalf of the issuers – the companies.

Onyebuchi explains that the secondary market is that for trading of shares listed on the stock exchange. He says this market is the hub of the capital market because it is the market in which members of the market, that is, the stockbrokers buy and sell stocks of companies or government. The presence of the secondary market for trading shares makes investment via primary market beautiful since shares bought in the primary market can be sold in the secondary market easily, discloses the author. He adds that no investor is allowed to transact business on the floor without going through a stockbroker.

Chapter two is based on the subject matter of the operations of the Nigerian stock market and its operators. According to the author, the Nigerian Stock Exchange provides the trading floor for equities in the Nigerian capital market. In his words, “The Nigerian Stock Exchange regulates the activities of market operators by ensuring orderliness and sanity in the market and also ensures that quoted companies comply with post-listing requirements.”

Chapter three is entitled “Guide to investing in the capital market”. According to the author, today, there are many reasons why one would invest in the capital market. He adds that the intention may vary from one investor to another, stressing that the investment objectives would determine the kind of stocks to either buy or sell, the quantity to be held and for how long.

The author says before investing in the capital market whether as a prospective or existing investor, you need to consider your investment philosophy first; create a written set of rules; know your risk tolerance; trade with confidence and be patient. As regards the company you want to invest in, Onyebuchi advises that you need to consider its superior earning growth; excellent management; value creation; accrued benefits and performance indicators.

In chapters four to eight, Onyebuchi analytically X-rays concepts such as understanding stock market vocabulary; key ways to be successful in the stock market; ways to lose money in the Nigerian stock market; how to read and understand the stock table; and designing a diversified portfolio.

Chapter nine is based on the subject matter of weighty points investors need to note. Here, the author says an investor depositing his or her share certificate with the Central Securities Clearing System (CSCS) for the first time is expected to fill the shareholder’s particulars form. He adds that with this, two numbers are assigned, the clearing house number and the investor’s account number with the stockbroking firm. Onyebuchi explains that the latter ties the investor to the stockbroking firm while the former ties the investor to the CSCS.

In chapters 10 to 12, Onyebuchi beams his intellectual searchlight on concepts such as fraud in the Nigerian stock market; causes, effects and repositioning of the Nigerian stock market crash; and frequently-asked questions by investors.

Stylistically, this text is okay. In spite of the technicality of the subject matter, the language is still understandable, especially that technical words are contextually explained. Onyebuchi uses graphical embroidery to visually enhance readers’ understanding. The outer front cover design is suggestive of the overall subject matter. The layout of the book is eye-friendly, with emphatic messages boxed for visual distinction. To fulfill academic or intellectual obligation of source disclosure for the purpose of credibility, bibliography is included at the end of the book. Major points of every chapter are equally summarised at the beginning to ensure easy study.

However, some errors are noticed. One of these is “Acknowledgement” (page vii), instead of “Acknowledgements”. Others are: “The later ties the investor….” (page 177) instead of “The latter ties the investor….”; “To enable you secure….” (page vi) instead of “To enable you to secure….”, etc.

Generally this text is a treasury of stock investing knowledge, specifically how to successfully invest in the Nigerian stock market. It is a must-have and must-read for anybody that is set to achieve tremendous success investing in stocks in Nigeria. It is intellectually irresistible.