Ways Nigerians Can Profitably Invest in the Financial Market (Legally)
Nigeria has the largest economy and the third most developed financial market in Africa. This impressive record comes with no surprise as the country boasts of one of the world’s strictest and most secure financial systems. While that’s the case, its strictness means the extensive regulation of all participants dealing in its financial markets.
At the same time, the financial markets leave endless possibilities open to investors. Aside from forex trading in Nigeria, there are many other legal and well-regulated mediums for investment. Although certain instruments and assets like cryptocurrency are illegal in the country, many legal choices are just as profitable to investors.
Legal Financial markets to invest in
Here are some legal financial markets to invest in Nigeria:
Billions of naira are traded on the floors of the Nigerian Exchange Group (NFX group) daily, and it’s not limited to institutional investors alone. The total market value of the Nigerian stock market is over ₦20 trillion; that suggests a reasonable amount of liquidity to handle major transactions if you intend to go in hard.
Lastly, you will need to seek licensing from NGX REGCO to be able to conduct your trades legally. While that’s the case, you can also seek the support of a certified financial analyst and broker to handle your transactions for you.
CFDs in Foreign Exchange Market (Forex)
This medium for investing in the financial market needs no introduction. The forex market is a globally recognized market for the exchange of currencies. While most international businesses need it to exchange their currencies across different accounts, it can also be traded by individual investors in the form of CFDs.
Trading the forex market through the Contract For Difference (CFD) model is open to both institutions and retail investors in the country. Aside from forex, other asset classes, including the previously mentioned stocks, can also be traded on brokerage platforms using CFDs.
The bond market (Treasury Bonds) is a medium through which companies and governments raise money to finance projects. As an investor, your activities will involve purchasing these bonds and selling them for an increased amount within a specific period.
Just like trading the stock market, you will need the assistance of a financial advisor or analyst working on the floors of the NGX.
Aside from these popular methods, Nigerian investors can also participate in OTC securities transactions through the NASD. While most high-profile investment opportunities and methods require the assistance of a financial analyst or advisor, transacting with CFDs requires only registration with a licensed brokerage platform that operates within the country.