Friday, June 2, 2023

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

Almost everyone wants to make money in the stock market. But a lack of knowledge of what it takes to be successful in stock investing has discouraged many people from fulfilling their investment and financial aspirations. It is therefore imperative to x-ray this text titled “The Nigerian Stock Market and You: The Smartest Ways to Play” to provide the necessary guidance to such people.

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

According to Onyebuchi, the book is written to free investors from financial shackles. He says it is important in stock investing that investors have a clear understanding of what they are doing with their money. It is the investors who really do their homework that become successful as successful investing requires time, initial capital, knowledge and skill; And determined, educates Onyebuchi.

He recommends that in order to have an edge over other investors, you must read stock investing books. The author stresses that you don’t need to wait until you have a lot of money or the market is bullish before reading about the stock market. Onyebuchi says that 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 change your life, starting with an overview of the Nigerian capital market, market operations, guiding rules for investing in the capital market, successful investor secrets, common investor mistakes, Etcetera. He elaborates that the book has the specific purpose of providing wage earners with an additional source of income; guiding retired employees on stress free and high return investment options; Revealing ways to respond to changes in the Nigerian stock market etc.

There are 12 chapters in the book. Chapter one is titled “An Overview of the Nigerian Stock Market”. According to Onyebuchi, the Nigerian stock market is a specialized market where shares are bought and sold; A market where long term funds are obtained through equity and debt instruments. He says that these instruments are subsequently traded openly in the stock market and include shares, bonds, industrial loans, derivatives, etc.

This author educates that the Nigerian capital market is divided into primary and secondary markets. According to Onyebuchi, the Nigerian primary market is what secures funding for initial issuers of shares. That is, the market provides an opportunity for companies seeking fresh funds with the help of applications issued by the issuer house on behalf of the issuers – companies.

Onyebuchi explains that the secondary market is for the trading of shares listed on the stock exchange. They say that this market is the center of the capital market because it is the market in which the members of the market i.e. the stock brokers buy and sell the shares of the companies or the government. The presence of a secondary market for trading shares makes investing through the primary market beautiful as shares bought in the primary market can be easily sold in the secondary market, reveals the author. He says that no investor is allowed to trade on the floor without a stockbroker.

Chapter two deals with the subject of the operation 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 order and prudence in the market and also ensuring 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 someone would invest in the capital market. He adds that the intention may differ from one investor to another, stressing that the investment objective will determine the type of shares to either buy or sell, the quantity to be held and for how long.

The author says that before investing in the capital market whether as a prospective or existing investor, you need to first consider your investment philosophy; Create a written set of rules; Know your risk tolerance; Trade with confidence and be patient. With regard to the company you want to invest in, Onyebuchi advises that you need to consider its superior earnings growth; excellent management; value creation; accrued profit and performance indicators.

In chapters four through eight, Onyebuchi analytically X-rays concepts such as understanding stock market terminology; Key Ways to Succeed in the Stock Market; Ways To Lose Money In The Nigerian Stock Market; how to read and understand stock tables; and designing a diversified portfolio.

Chapter nine is based on the contents of the important points that investors need to pay attention to. Here, the author states that for the first time an investor submitting his share certificates with the Central Securities Clearing System (CSCS) is expected to fill up a shareholder’s details form. He says that with this, two numbers are given, the clearing house number and the account number of the investor with the stockbroking firm. Onyebuchi points out that the latter connects the investor to the stockbroking firm while the former connects the investor to the CSCS.

In chapters 10 to 12, Onyebuchi delves into his intellectual pursuits on concepts such as fraud in the Nigerian stock market; Causes, Effects and Recovery of the Nigerian Stock Market Crash; and frequently asked questions by investors.

Stylistically, this text is fine. Despite the technicality of the subject matter, the language is still understandable, especially given that technical terms are explained contextually. Onyebuchi uses pictorial embroidery to visually enhance the readers’ understanding. The outer front cover design is indicative of the overall subject matter. The book’s layout is friendly to the eye, with strong messages for visual distinction. The bibliography is included at the end of the book to satisfy the academic or intellectual obligation of source disclosure for the purpose of credibility. The key points of each chapter have been uniformly summarized in the beginning to ensure easy study.

However, some errors are observed. One of these is “acknowledgement” (page vii), instead of “acknowledgement”. Others are: “The latter binds the investor…” instead of “The latter binds the investor…” (p. 177); “To enable you to secure…” (page vi) instead of “To enable you to secure…”, etc.

This text in general is a wealth of stock investing knowledge, specifically how to invest successfully in the Nigerian stock market. This is a must have and must read for anyone who is ready to achieve tremendous success in shares in Nigeria. It is intellectually irresistible.

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