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Tuesday, July 20, 2010
Thursday, June 24, 2010
YEAR END
The year end of a company is the month the financial year of that company is assumed to be ending. i.e., it started December previous year and will close December next year. One full year of operation.
However, year end is very important in any investor or aiming investors. This is because it helps to take decisions on investment; when to buy and when to sell.
Quarterly results
This result is mandated to any company listed on the Nigerian Stock Exchange to publish quarterly. It is the result of a company’s quarterly (3 months) financial operation.
These results are published on any national newspaper and can also be viewed online at the exchange’s website.
Year end of some companies
Visit www.nigerianstockexchange.com for full list.
Advice to investors
Though we might not have met physically, but through this piece we have. As an investor/ aiming investor, it will do you much good to adhere to these advices for a bountiful harvest.
INFORMATION: this is a market where information rules. Be informed on regular basis. Read “Stock watch weekly”, “Financial Standard newspaper”, “Business Day” etc., for more enlightenment on the stock market.
TRUST: do not over trust a company no matter how well they might be doing. Diversify your investment. Buy the stocks of several companies.
MONEY: do not put all your eggs in one basket. Please, invest only what you can endure in case of loss. The profit you make id determined by the risk you take.
SELLING: sell the least performing stock to buy more of the high performing stock.
GREED: do not be greedy. You cannot take all the benefit of a particular stock.
However, year end is very important in any investor or aiming investors. This is because it helps to take decisions on investment; when to buy and when to sell.
Quarterly results
This result is mandated to any company listed on the Nigerian Stock Exchange to publish quarterly. It is the result of a company’s quarterly (3 months) financial operation.
These results are published on any national newspaper and can also be viewed online at the exchange’s website.
Year end of some companies
Visit www.nigerianstockexchange.com for full list.
Advice to investors
Though we might not have met physically, but through this piece we have. As an investor/ aiming investor, it will do you much good to adhere to these advices for a bountiful harvest.
INFORMATION: this is a market where information rules. Be informed on regular basis. Read “Stock watch weekly”, “Financial Standard newspaper”, “Business Day” etc., for more enlightenment on the stock market.
TRUST: do not over trust a company no matter how well they might be doing. Diversify your investment. Buy the stocks of several companies.
MONEY: do not put all your eggs in one basket. Please, invest only what you can endure in case of loss. The profit you make id determined by the risk you take.
SELLING: sell the least performing stock to buy more of the high performing stock.
GREED: do not be greedy. You cannot take all the benefit of a particular stock.
BONUS SHARES
Bonus shares are shares issued free to the shareholders of a company. This is done to appreciate the shareholders.
From the trace of some companies which ended their previous year (2008) in 2009, we will find out that some appreciated their shareholders with some bonus share deduced from the Annual General Meeting of such company payable according to the shareholders holdings.
Bonus share declared by some companies in 2009:
This can be viewed at the exchanges website.
From the trace of some companies which ended their previous year (2008) in 2009, we will find out that some appreciated their shareholders with some bonus share deduced from the Annual General Meeting of such company payable according to the shareholders holdings.
Bonus share declared by some companies in 2009:
This can be viewed at the exchanges website.
DIVIDEND
This is known as some fraction of a companies profit shared among its shareholders. The profit shared is known as Profit After Tax (PAT). Not all profit made is shared but some percentage of it while the remaining are reinvested into the business for expansion of operation.
After the audited result of a company is released, the company holds their annual general meeting (AGM) and decides whether to reward their investors with dividend or not. But if dividend was declared by the company, a date at which the companies register is to be closed (knowing the beneficiary of the dividend) and the payment date is made known to the shareholders.
Note: dividend is paid to a shareholder according to his/her holding in the company.
Example:
If a company declares a dividend of $1 and Mr. A has 10000units of the companies share while Mr. B has 100000units. This means Mr. A and Mr. B are entitled to a dividend of-
Mr. A 10000
Mr. B 100000
Dividend declared by some companies in 2009
This can be viewed at www.nigerianstockexchange.com
After the audited result of a company is released, the company holds their annual general meeting (AGM) and decides whether to reward their investors with dividend or not. But if dividend was declared by the company, a date at which the companies register is to be closed (knowing the beneficiary of the dividend) and the payment date is made known to the shareholders.
Note: dividend is paid to a shareholder according to his/her holding in the company.
Example:
If a company declares a dividend of $1 and Mr. A has 10000units of the companies share while Mr. B has 100000units. This means Mr. A and Mr. B are entitled to a dividend of-
Mr. A 10000
Mr. B 100000
Dividend declared by some companies in 2009
This can be viewed at www.nigerianstockexchange.com
CSCS
This is an acronym for Central Securities Clearing System. (CSCS) Limited is a subsidiary of The Nigerian Stock Exchange (NSE) as well as the Clearing House of the Nigerian stock market. It was incorporated on July 29, 1992 and commenced operations on April 14, 1997....
CSCS Digital Centre is wholly owned by The Central Securities Clearing Systems (CSCS) Limited, they offer total record management solutions, from physical documents to electronic document management solutions. They make documents available for clients use 24 hours on line web access on a secured network.
T + 3 Days
T+3 is a term common to stockbrokers and investors. It is the process involved in paying an investor that sells his/her shares in the secondary market. T+3 means: trading day plus three days after.
Example:
Remains as stated Monday if possible and three days after, you come to collect your cheque of the sold shares.
o Monday, T =trading day
o Thursday, 3 =three days after.
Though there are insights that the number of days required might be reduced to the barest minimum so as to hasten the process. But presently, the process involved in selling in the secondary market is still as stated.
Daily price check
There is need of monitoring your investment through checking the price daily. This will help in your investment decisions; what to buy and when to sel. The price at which a stock closed for the day which can also be the opening price of the stock the next day are found in our daily newspapers. You could also view the price directly from the internet. www.nigerianstockexchange.com or www.cscsnigerialtd.com
Benefits
You are free from theft, fire outbreak, missing share certificate etc
Selling is easier
You are entitled to e-bonus share
Your CSCS print out can be used to know the authenticity of your share. In case if you want to get loan
CSCS Digital Centre is wholly owned by The Central Securities Clearing Systems (CSCS) Limited, they offer total record management solutions, from physical documents to electronic document management solutions. They make documents available for clients use 24 hours on line web access on a secured network.
T + 3 Days
T+3 is a term common to stockbrokers and investors. It is the process involved in paying an investor that sells his/her shares in the secondary market. T+3 means: trading day plus three days after.
Example:
Remains as stated Monday if possible and three days after, you come to collect your cheque of the sold shares.
o Monday, T =trading day
o Thursday, 3 =three days after.
Though there are insights that the number of days required might be reduced to the barest minimum so as to hasten the process. But presently, the process involved in selling in the secondary market is still as stated.
Daily price check
There is need of monitoring your investment through checking the price daily. This will help in your investment decisions; what to buy and when to sel. The price at which a stock closed for the day which can also be the opening price of the stock the next day are found in our daily newspapers. You could also view the price directly from the internet. www.nigerianstockexchange.com or www.cscsnigerialtd.com
Benefits
You are free from theft, fire outbreak, missing share certificate etc
Selling is easier
You are entitled to e-bonus share
Your CSCS print out can be used to know the authenticity of your share. In case if you want to get loan
PRIMARY MARKET
At times, we tune our radio and/or our TV stations only to hear adverts of some companies selling shares. In our newspapers, the adverts are in print. Even in the websites of such company, the information about the shares being sold is being written; alongside with the opening and closing date of the offer all those activities are known as the primary market.
Primary market therefore is the place where new shares are offered for subscription by a company to the investing public. These shares are offered in units to the investing public when the company is about to raise money either for branch expansion and/or diversification to other sectors of business.
The shares of these companies are bought in banks used as issuing houses , stockbrokers or directly from the company and the money is paid in the required banks of the company in full on application. A share certificate is being issued to the investor within some months (three months or more) after the completion of the offer stating clearly that he/she is a share holder of that company and the units of shares being held.
The total number of shares a company offers to the investing public can be undersubscribed: investors only bought part of it. Or it may be oversubscribed; investors bought more than required and in this case, some of the funds are returned to the investor or absorbed by the company as stated in the prospectus.
Ipo
This is known as “initial public offer”. It is the first time a company is coming to the primary market to raise fund. The company might not have been listed in the Nigerian Stock Exchange (NSE). But listed after the completion of the offer. Or, the company has been listed but sourcing fund for the first time from the public.
po
This is known as “public offer”. It is a means a company source fund from the public by offering for subscription subsequent numbers of shares at a particular price. The company must have done IPO before doing this. This being the case, the share certificate arrives earlier than the IPO.
Right issue
This is a kind of “public offer” done by a company if there is need to inject another capital into the company. This offer is beneficial only to the existing shareholders of the company.
Issuing houses
The issuing house of a stock sells the stock of the company, buys the largest share and/or markets the shares of the company.etc.
Benefits of primary market:
The benefit a person gets from the primary market is according to the type of investor he/she is. But the major benefits of a primary market investor are:
• You do not pay a brokerage fee when buying from the primary market. But if necessary, it is little.
• You buy at a discounted rate to the current market price on the floor of the exchange.
• You are being issued a certificate some months after the completion of the offer.
• Your shares can be deposited into your CSCS account if the CSCS number was included
• You can sell if you wish
Note: the investors can buy only the stock of a company currently on primary market activity and not the stock he/she intends buying.
Secondary market
On like the primary market, the secondary market is a place where existing number of shares of a company listed on the Nigerian stock exchange are traded (bought or sold) on daily basis. These stocks active or not change hands daily by investors.
In this market, there is no limit to what you buy. You buy the stock of a company either selling in the primary market or not in this market (secondary market) as you wish. The shares bought or sold are done through a stock broker. Remember, you will be charged a commission for each transaction.
When you buy shares of a company in the secondary market through a stockbroker, you are first issued a receipt stating amount deposited, then followed by a bought contract note and finally your CSCS print out. You must have opened a CSCS account with your stockbroker because it is where all shares bought by you through your stockbroker is deposited
Capital requirement
Each stock broking firm has its own requirements/standard of operation. Some tell you to make an initial deposit of some amount of money to qualify while some does not. It varies. But generally, to become a share holder in the secondary market, one must process at least 100units of the company’s shares.
Example:
o if a share sells at N50
o Minimum number of units 100
o Value of 100 units N5000
I.e. you must be able to buy at least 100 units of it at $50 per share. Remember you pay a commission.
Scarcity
Scarcity in the secondary market refers to much capital chasing few stocks. i.e., the supply of the company’s shares was lesser than the demand. This being the case, the stock is referred as scarce. The stock must also be good since investors scramble to have them.
Some listed securities
The securities listed on the secondary market are same as those on the Nigerian stock exchange. The number increases gradually because companies get listed.
Benefits
You can buy at any time
You can sell at any time
You can sell part of it and reserve others
You decide on what company to invest in. etc.
Primary market therefore is the place where new shares are offered for subscription by a company to the investing public. These shares are offered in units to the investing public when the company is about to raise money either for branch expansion and/or diversification to other sectors of business.
The shares of these companies are bought in banks used as issuing houses , stockbrokers or directly from the company and the money is paid in the required banks of the company in full on application. A share certificate is being issued to the investor within some months (three months or more) after the completion of the offer stating clearly that he/she is a share holder of that company and the units of shares being held.
The total number of shares a company offers to the investing public can be undersubscribed: investors only bought part of it. Or it may be oversubscribed; investors bought more than required and in this case, some of the funds are returned to the investor or absorbed by the company as stated in the prospectus.
Ipo
This is known as “initial public offer”. It is the first time a company is coming to the primary market to raise fund. The company might not have been listed in the Nigerian Stock Exchange (NSE). But listed after the completion of the offer. Or, the company has been listed but sourcing fund for the first time from the public.
po
This is known as “public offer”. It is a means a company source fund from the public by offering for subscription subsequent numbers of shares at a particular price. The company must have done IPO before doing this. This being the case, the share certificate arrives earlier than the IPO.
Right issue
This is a kind of “public offer” done by a company if there is need to inject another capital into the company. This offer is beneficial only to the existing shareholders of the company.
Issuing houses
The issuing house of a stock sells the stock of the company, buys the largest share and/or markets the shares of the company.etc.
Benefits of primary market:
The benefit a person gets from the primary market is according to the type of investor he/she is. But the major benefits of a primary market investor are:
• You do not pay a brokerage fee when buying from the primary market. But if necessary, it is little.
• You buy at a discounted rate to the current market price on the floor of the exchange.
• You are being issued a certificate some months after the completion of the offer.
• Your shares can be deposited into your CSCS account if the CSCS number was included
• You can sell if you wish
Note: the investors can buy only the stock of a company currently on primary market activity and not the stock he/she intends buying.
Secondary market
On like the primary market, the secondary market is a place where existing number of shares of a company listed on the Nigerian stock exchange are traded (bought or sold) on daily basis. These stocks active or not change hands daily by investors.
In this market, there is no limit to what you buy. You buy the stock of a company either selling in the primary market or not in this market (secondary market) as you wish. The shares bought or sold are done through a stock broker. Remember, you will be charged a commission for each transaction.
When you buy shares of a company in the secondary market through a stockbroker, you are first issued a receipt stating amount deposited, then followed by a bought contract note and finally your CSCS print out. You must have opened a CSCS account with your stockbroker because it is where all shares bought by you through your stockbroker is deposited
Capital requirement
Each stock broking firm has its own requirements/standard of operation. Some tell you to make an initial deposit of some amount of money to qualify while some does not. It varies. But generally, to become a share holder in the secondary market, one must process at least 100units of the company’s shares.
Example:
o if a share sells at N50
o Minimum number of units 100
o Value of 100 units N5000
I.e. you must be able to buy at least 100 units of it at $50 per share. Remember you pay a commission.
Scarcity
Scarcity in the secondary market refers to much capital chasing few stocks. i.e., the supply of the company’s shares was lesser than the demand. This being the case, the stock is referred as scarce. The stock must also be good since investors scramble to have them.
Some listed securities
The securities listed on the secondary market are same as those on the Nigerian stock exchange. The number increases gradually because companies get listed.
Benefits
You can buy at any time
You can sell at any time
You can sell part of it and reserve others
You decide on what company to invest in. etc.
STOCK BROKER
Buying and selling of shares of companies are done daily on the Nigerian Stock Exchange (NSE). Equities change hands; from one individual to another. Stocks of companies are traded daily on the exchange. All these are done through a stock broker.
A stock broker is a person legally authorized by the Nigerian Stock Exchange to buy and sell stocks on behalf of investors/clients.
For every buying or selling carried out, the investor is charged certain percentage which is called commission or brokerage fee. Though there are indications that the brokerage fee will further be reduced to the barest minimum so as to attract investors to the market. The amount being charges now are thus:
• 2.355% of the value of shares you are buying
• 2.6475% of the value of shares you are selling
Example:
If the selling price of a stock is =N3
Number of units you want to purchase is =1000units
So the total value of the stock is :3×1000 =N3000
Then, buying brokerage fee = N(2.355÷100 ×3000)
Selling brokerage fee = N(2.6475÷100 ×3000)
In the same vein, the fees charged by the stock brokers are not absorbed by them alone. It is further divided among sectors of some department on the exchange. It is also important to note that you only pay commission/brokerage fee if you are buying from the secondary market.
A stock broker is a person legally authorized by the Nigerian Stock Exchange to buy and sell stocks on behalf of investors/clients.
For every buying or selling carried out, the investor is charged certain percentage which is called commission or brokerage fee. Though there are indications that the brokerage fee will further be reduced to the barest minimum so as to attract investors to the market. The amount being charges now are thus:
• 2.355% of the value of shares you are buying
• 2.6475% of the value of shares you are selling
Example:
If the selling price of a stock is =N3
Number of units you want to purchase is =1000units
So the total value of the stock is :3×1000 =N3000
Then, buying brokerage fee = N(2.355÷100 ×3000)
Selling brokerage fee = N(2.6475÷100 ×3000)
In the same vein, the fees charged by the stock brokers are not absorbed by them alone. It is further divided among sectors of some department on the exchange. It is also important to note that you only pay commission/brokerage fee if you are buying from the secondary market.
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