Trading from Nigeria? Find out which markets to explore in and out of the African continent and how online trading can help you trade globally.
Lucrative markets for Nigerian traders
The stock market is the ultimate form of capitalism. It provides a platform where businesses can raise capital and people can invest in them with the aim of making money. But with hundreds of companies trading on Nigerian Stock Market (NSE) exchanges, how do you know which stocks to buy? The Nigerian Stock Exchange (NSE) is the largest stock exchange in Africa. The Nigerian economy has experienced rapid growth over the last few years, and foreign investment has increased significantly. This trend is expected to continue, with analysts predicting impressive future growth for the country. A real benefit of trading in today’s high-tech climate is that the act of trading itself has availed itself to so many more people. Online trading is almost ubiquitous thanks to the amount of brokers that now provide such services. It means that Nigerian traders aren’t confined to the movements and markets of the NSE alone, but can instead explore the various global markets and all their financial intricacies. With all this in mind, let us now examine a number of lucrative markets for Nigerian traders.
The NGX Premium
The Nigerian Exhange Group (NGX) is in essence an index market, and can be likened to UK’s FTSE 100 or the US’ S&P 500 – group listings for the most successful or highly valued companies in each respective country. Japan has the Nikkei 225, and Nigeria has the NGX Premium. By way of various international online brokers, trading on NGX and FTSE indexed companies is a feasible practice made better by the fact that most brokers offer demo accounts to beginners and novice traders. The premium board lists and showcases companies that have proven themselves to be industry leaders. Membership to the Premium board requires that companies adhere to the best global practices regarding corporate governance and meet the Premium required standards of liquidity and capitalisation. A company that receives a Premium Board listing will gain access to an international pool of investors with a common goal of focusing on high standards in respective target markets.
The FTSE 100
Online trading allows for Nigerian traders to move well beyond their own borders. The FTSE 100 (Financial Times Stock Exchange 100 Index), commonly referred to as the “footsie”, is a stock market index that represents the 100 companies listed on the London Stock Exchange (LSE) with the highest market capitalisation. Stock market indexes or indices markets are measured in points and are often home to blue chip stock companies such as Unilever, AstraZeneca and Vodafone to name but a few. The FTSE 100 is annually reviewed and companies no longer meeting or complying with their exceptionally high standards are dropped from the list in order to make way for a new comer.
The foreign exchange market, or forex, is a global decentralized currency market. There are many different platforms out there which allow you to trade in the currency market. The most popular one is MetaTrader4, a trading platform that’s available through a number of established and reputable online brokers. One of the major advantages of using a trading platform like MetaTrader 4 is its automated trading feature, which lets the user integrate it with trading robots based on a specific strategy. Today, forex has become one of the most preferred online investments because it allows people to trade in a free market with minimal restrictions and high liquidity.