Riding Nigeria’s Stock Surge: Practical Tips and Steps to Enter the Market Safely

The benchmark NGX All-Share Index (ASI) closed at 171,727.49, up 1,722.13 points or +1.01 per cent from the previous session, as the Nigerian stock market reached its highest level ever due to strong buying pressure in blue-chip stocks.

The index recently crossed the 170,000-point mark amid increased buying interest, setting a new all-time high. Market capitalization rose significantly to N110.234 trillion.

Energy, banking, industrials, telecoms, consumer goods, and agriculture are the main sectors driving the rally.

Blue-chip stocks like Seplat Energy, Zenith Bank, and MTN Nigeria are in the lead because of their potential for dividend growth, strategic developments like asset acquisitions and new listings, and solid earnings growth.  IPOs of the Dangote Refinery and Fertilizer are still expected this year

Market projections indicate that the All-Share Index could increase by 31% (United Capital), 45% (some asset managers), or even more in highly optimistic scenarios, driven by macroeconomic improvements such as moderate inflation, stable foreign exchange rates, GDP growth projections of 3–4%, and monetary easing.

Positive factors include ongoing reforms, growing investor confidence, liquidity ahead of the 2027 election, and new listings that boost market cap.

Risks involve possible profit-taking, industry-specific pressures, and global headwinds like regulating bank profitability after recapitalization.

Year-to-date, the ASI has risen by +10.36 per cent, with significant investor gains—roughly N2.98 trillion earlier this week alone before this breakthrough.

More than 160 listed companies offer investment opportunities.

Primarily traded on the Nigerian Exchange Limited (NGX), the Nigerian stock market is an excellent option for both domestic investors (individual Nigerians) and international investors (multinational companies).

A growing number of young Nigerians (millennials and Gen Z) are investing in stocks through intuitive apps.

Despite high inflation, this trend democratizes investing and makes stock market access more feasible for wealth creation.

Key investment terms include bonds, equity shares (stocks), and exchange-traded funds (ETFs), which you should educate yourself about.

Step 1: Open an account with a brokerage firm and complete the KYC process

You can access the NGX app, visit the brokerage office, or use their website.

You will need to submit an ID (National ID, Voter’s Card, Passport, or Driver’s License) and an address verification (utility bill or bank statement no older than 3 months).

Choose a licensed stockbroker, preferably an NGX Dealing Member with SEC approval. For updates, visit sec.gov.ng.

Consider reputation, fees (commissions ranging from 0.5% to 1.5%), and whether they have a website.

Submit a passport-sized photo and your Bank Verification Number (BVN). International clients must provide notarized ID and proof of address.

The KYC process takes 1–3 days, after which you’ll receive a Central Holding Number (CHN) from the Central Securities Clearing System (CSCS) to track your shares.

Step 2: Register with CSCS.

Your broker will handle this when you open your account. CSCS offers a secure trading settlement system and maintains a centralized record of ownership. You will be issued a unique account number for your trading activities.

Step 3: Fund your account

The broker will specify minimum funding amounts, which can vary (for example, N10,000 on some trading apps).

Transferring funds in NGN to your broker’s designated bank account using your local bank is recommended for simplicity.

Start with an amount you’re comfortable risking; learn the basics of the market first, including indices like the All-Share index, to understand how economic factors influence fluctuations. Use tutorials or educational apps to gain knowledge.

Begin small; there’s no minimum investment required, allowing you to diversify and eventually grow your investment beyond N10,000.

Step 4: Be cautious, Rome was not built in a day

Maintain Broad Diversification and Regular Rebalancing. When possible, spread investments across various industries and asset classes to reduce concentration risk.

Certain asset classes perform better than others in a prolonged bull market, causing portfolio skew.

With a portfolio skew, there is a higher risk of a loss due to a downturn in the same asset class. Rebalancing can change that. Stop-loss and take-profit orders will allow positions to be trimmed to restore balance.

Use Risk Mitigation Tools. Automated Loss and Gain American-style Coinbase Pro orders, take profit, and stop loss will help save positions in a downturn and limit losses on profit reversals by a sell automation order when a loss is triggered at a specific price.

Keep An Eye on the Overall Picture: Data, Events, and Other Things help pinpoint the right moments when to be cautious in even the best bull environments and even the best bull traps.