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Top 10 Functions of The Nigerian Stock Exchange Market

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Top 10 Functions of The Nigerian Stock Exchange Market. In this article, we will consider the functions of Nigerian stock exchange. Nigerian Stock Exchange exists to control and regulate the flows of money in the state, to provide favorable conditions for organizations and individual entrepreneurs engaged in trade, investing money in shares for the purpose of getting profit.

Functions of The Nigerian Stock Exchange Market

Are you an Investor? Do you know the duties and functions of the Nigerian stock exchange? If you’re willing to know, Look no further as we have compiled a list of the Top 10 functions of The Nigerian Stock exchange market:

Table Of Contents

What is Stock Exchange?

Stock exchange is a sort of system or market in which the goods and services bought and sold are securities.

The Nigerian stock exchange was established in 1960 in Lagos and was then called the Lagos Stock Exchange. It began formal operation on August 25 1961. The Nigerian Stock exchange is controlled by the Securities and Exchange Commission.

See Also: Top 20 Functions of the Central Bank of Nigeria

How did the Nigerian Stock exchange come to place?

It was established in 1961 as the Lagos Stock Exchange and In 1977, its name was changed from the Lagos Stock Exchange to the Nigerian Stock Exchange.

It currently exchanges with  about 166 equities, 154 bonds, 9 Exchange Traded Funds (ETFs), and 53 memorandum listings with a total market capitalization of over ₦28 trillion as at January 9, 2019.

How many sectors do we have in the Nigerian stock exchange?

We have about 12 Sectors in the Nigerian stock exchange market.

The different sectors in the Nigerian stock exchange system are:

  1. Consumer serviced sector
  2. Basic Materials sector
  3. Consumer Goods sector
  4. Financial sector
  5. Health sector
  6. Industrial sector
  7. Technology sector
  8. Oil and gas sector
  9. Agriculture sector
  10. Construction/ Real Estate
  11. Information & Communications Technology
  12. Natural Resources

What products do the Nigerian stock exchange offer?

The Nigerian Stock Exchange offers a comprehensive range of products, including shares (equities), exchange traded funds (ETFs) and bonds, all of which can be bought and sold on the largest stock exchange in the West African sub-region in a transparent and timely manner through your stockbrokers registered with the Nigerian Stock Exchange .​​​

See Also: Top Best Wealth Management Companies In Nigeria

What are the jobs or functions of the Nigerian Stock exchange?

The Nigerian Stock exchange performs various functions some of which have been outlined as:

    1. It helps the government in dealings of security
    2. It encourages savings and investment as it is the duty of the Nigerian stock exchange to motivate Nigerian citizens to save
    3. It helps the government in implementing policies on Monetary related issues
    4. It helps in combating inflation
    1. Provides opportunities for companies to raise capital
    2. It helps in Advising both investors and government on issues concerning stocks and securities
    3. Helps in Sending information to industrialist and entrepreneurs.
    4. Makes available criteria for measuring a company’s good will.
    5. It gives room for buying and selling of stocks and securities.
    6. It helps to protect its investors from shady deals.

See Also: Top 10 Best Investment Companies In Nigeria

At the moment, the activity of exchange is controlled by the state in order to prevent violations of market rules. All unfair manipulations are discovered and cut off in time.

Absolutely fair trading practice is provided. The work of the exchange is improved by the introduction of an automated system. Information on the activities of companies is published every day.

Reports are prepared every week, month, quarter, and year. For dealers, it is extremely convenient that since 1999 they can use a computer for conducting commercial operations. Communication with the central server is maintained.

Remote monitoring and management are very important in the business world, where every minute is extremely important. In total there are 13 branches in the country.

The exchange works on the creation of additional representative offices, which will have to ensure effective trade in real time. You can start trading at 9:30 and it is crucial that you finish the work before 14:30. To stimulate the inflow of funds from abroad, state authorities abolished many laws that prevent it.

Foreign brokers can become dealers of Nigerian stock exchange. Access is open to investors of any nationality. There are no restrictions for business. It’s really hard to argue with the NSE importance.

Let’s hope that this organization and other measures taken by the state government situation will lead to an improvement in the Nigerian economy.

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