A stock is a share of a company’s ownership. Also known as an equity, it is made possible by breaking down the value of a company into small units given a nominal value. These units then acquire a market value based on the company’s performance and market perception.
The shares, or equities, are then listed or quoted on a stock exchange or a stock (equities) market for trading. Usually the exchanges are trading platforms set up and run as business concerns, with its own shareholders and a board of directors.
Market activities are overseen by a regulatory body known in most countries as a securities and exchange commission. As the name denotes, these regulatory bodies regulate trade in securities, meaning not just stocks but also other tradable financial instruments including stocks, bonds, exchange-traded funds, derivatives, commercial papers and more.
Buying and selling of shares and other securities on behalf of investors, whether individuals or companies, are facilitated by specialists known as stock brokers, who work in stock-broking firms or brokerages. Banks also generally serve as brokers, even having specialized investment-banking units, that provide advisory services and implement their customers’ investment decisions. They function as intermediaries and receive commissions for the transactions they execute.
The Nigerian Stock Exchange
The Nigerian equities market is essentially dominated by the Nigerian Stock Exchange, which has its main trading floor in the country’s commercial capital, Lagos. In the past it had trading floors in the northern city of Kano and the southern city of Onitsha, the commercial hub on the Bank of the Niger River. Both have been dormant in recent decades as the bulk of securities trading in Nigeria moved to Lagos.
There are 325? companies listed for trading on the main board of the Nigerian Stock Exchange. They include xx banks, xx manufacturing companies, xx insurance, etc, with a total market capitalization — the sum value of all shares traded on the exchange at xx trillion naira as of xxx.
The market also has a secondary listing for companies with smaller market capitalization. In recent years it has included over-the-counter trading in bonds and added products such as depository rights, mutual funds and exchange-traded funds.