If you bought the MTN Nigerian stock when it was made available for retail investors in 2021 you would have gained 71.5% of your investment and if you bought when it was initially listed in 2019 the percentage gain would be 222%. If you put in N100,000 in 2021 you would have gained N171,500. Not bad, right?
If you had put your faith in Transcorp Hotel in 2023, your percentage gain would have been 1328% meaning N100,000 worth of Transcorp Hotel shares at N7/share in March of N2023 would have returned N1,328,000 in January of 2024.
The Nigerian Stock Exchange ( NGX) has continued to defy the odds to post an incredible growth rate- rates that beat inflation. Last week, it posted a growth rate of 13.8% alongside a YTD(year-to-date) performance of 26.4%. It has been reported that the NGX in the past year performed better than all other stock exchanges in the world. Stocks with over 1 Trillion market capitalization, also known as SWOOT have helped to sustain this growth. These stocks include Dangote Cement, Airtel, Nestle, MTN, BUA cement, BUA food, Zenith Bank, GTCO and Seplat.
In the Richest Man in Babylon( I hope you have read the book) the wise man Arkard advised as part of the “Seven Cures” to a lean purse to “multiply thy Gold” and “Fatten thy purse”. To create wealth, one must invest and allow their money do work to in other to gain more money. The parable of the Talent in the Bible is another example of using money to create more wealth.
The NGX is one such way one can make thy gold multiply and fatten thy purse. For starters, the stock exchange permits one to own a part of a company quoted on the stock exchange by purchasing at the quoted stock value. It is expected that when you invest in a company on a stock exchange you own parts of it (equity). The company uses the fund to increase the productivity of the company leading to a rise in the value of the company and your investment
When Investing in the stock exchange, there are factors to consider and the major for me is to determine the driving motive for the investment. The motive defines what kind of stock to invest in.
I classify Stocks into three: Growth Stock, Value Stock and Income Stock. Growth stocks are stocks which are expected to rise in value sharply due to an innovation the company is expected to bring to the market. When Tesla listed initially in 2010, its share price was $15 within 13 years the share price has risen by 1313% to become $212 at the moment. On the other hand, a value stock are stock of companies which one invests in because they can deliver sustained value over a long time. Income Stocks are those stocks that give you the ability to earn through dividends. If your interest in investing is to earn a dividend then income stock is what you should look at. In 2022, MTN paid a total of N15.60/share
Remember all investments carry a risk and the beauty of investing in the stock market according to the renowned investor Warren Buffet is the power of compounding interest. To play in the stock market, contact your stock advisor even though there are apps such as Bamboo, Trove and Risevest that you can rely on to trade. Financial advice from professionals is necessary.
In the year 2024, whatever your strategy is, ensure you allow your money to work for you