The First Steps to Stock Trading in Africa

If you happened to buy a stock of TotalEnergies Marketing Nigeria Limited in the 3rd quarter of 2021, you would have saved, on average, 6% of the company’s share price and earned up to 19% in dividends.

When I started my investment journey, there were no investment opportunities as varied as we have today. However, I was steadfast in exploring Nigeria’s automotive spectrum based on the population, the shortages of means of transport, and the increasing demand for better means of transport. These are pivotal in facilitating people’s movements, trade, and supply chain, amongst others, and, as a result, guaranteeing my return on investment. I started with as little as a hire purchase motorcycle for transportation, whilst saving to purchase a fleet of cars. These precipitated my co-founding of Cars45 and Autochek Africa, which gave me a lot of exposure in the African automotive space, before other passive investments in real estate and others began.?

However, you need not start from scratch as I did. You can as well buy stocks of well-performing companies like TotalEnergies Marketing Nigeria Limited and S&P 500 on various stock exchange markets to share the minimum risk and earn dividends yearly. This you can achieve without being a member of the board of directors of the company. As it depends on the stock you are buying, its value and policy.

The essence of this is the high returns with low risk involved as part of the process. Risk, as simply put by Warren Buffett, comes from not knowing what one is doing, and the beginning of your investment could be similar to that, especially when you are investing alone.

If at all, you'd like to invest in stocks, my advice is to start with an African stock or a global stock like the S&P 500. The African economy is worth about $2.6 trillion, with annual consumer and sector spending totalling $6.6 trillion as of 2021, and it is calculated to reach up to $29 trillion by 2050. Nigeria came in at #1 with $442.98 billion in GDP, followed by Egypt with $361.88 billion and South Africa with $282.59 billion. The continent is being dominated by varying degrees of development in mining, technology, and Fintech, amongst others, and it houses companies such as MTN Group Limited (OTC: MTN), and Sasol Limited. Hence, the visibility of the African stock exchange is a better investment platform to start.

This is further corroborated by the following African Stock Markets 2021 ROI, against the COVID-19 protocols and the economic downturn that threatened the economy. These 10 stock exchange markets outperformed the other 17 African stock exchange markets.

• Lusaka Securities Exchange: According to Business Insider Africa's research, this was Africa's best-performing stock exchange last year. The Lusaka Securities Exchange increased by 93.2 percent.
• Ghana Stock Exchange: The Ghanaian stock exchange was the continent's second-highest performer, with investors gaining 38.59 percent.
• Malawi Stock Market: In 2021, this stock exchange saw a 32.24 percent gain for investors, making it Africa's third best-performing stock exchange.
• Johannesburg Stock Exchange: The JSE's All Share Index finished 2021 with a gain of 24%, making it the fourth-best performer of the year.
• Mauritius Stock Exchange: This stock exchange ended in 2021 with a gain of 16.7%.
• Casablanca Stock Exchange (Casablanca Stock Exchange): This North African stock exchange closed in 2021 with a gain of 15.9% for investors.
• The Egyptian Exchange: The Egyptian Exchange finished 2021 with a gain of 9.8%.
• Nairobi Securities Exchange: Kenya's stock market rose 7.8% in 2021, making it the eighth highest performer in the previous year.
• Nigerian Exchange Group: The Nigerian Stock Exchange's All Share Index gained 6.07% in 2021.
• Dar es Salaam Stock Exchange: The Dar es Salaam Stock Exchange gained 4.0 percent in 2021.

Would you also like to be one of the benefactors of these dividends from stocks? Explore African stock exchanges and other global stock exchanges.

Stock exchanges are stock markets where company stocks are listed and can be purchased. Today, most stock trading takes place online, with only a few trades taking place on the real market floor. The physical market floor is where you would see individuals rushing about on their phones, as one would see in the movies. They are continually staring up at the stock prices that are displayed so as to coincide with the best stock price. Still, the best place to follow up and invest is online.

Here are the keynotes for 2022 investors:

• Buy stocks of companies you understand only. This would help you minimize risk.
• Consider the company’s meaning, moat, management, and safety margin. This would inform your decision and secure you against investment scams and losses.
• Long-term investors can target the projected dip in the second quarter of 2022, as this would position them at a comfortable support price level with a greater dividend yield.
• Diversify your stocks to prevent double losses. Companies’ stock prices and growth are not static. The market swings - when one market dips, the other has the potential to grow. Hence, you need to buy different stocks from multiple markets to safeguard yourself from multiple losses.

Conclusively, as early investors, the knowledge of varying markets is the beginning of successful stock trading. Investment, either short-term or long-term, is key to the achievement of future and present goals. It works as a financial safety net in an emergency. Although, one cannot accurately predict the future of stock trading with the knowledge of the past. One can prevent double losses through diversification and recommendations from long-term investors. As you diversify investments by firm size, industry, investment type (stocks, mutual funds, etc.), and geography, S&P 500 stock comes highly recommended due to its rich past and the quality of companies under it. With these, you study the stock trends, invest, and grow.?

Reference

• Business Insider Africa