One of the oldest forms of investment in the world is shares. The acquisition and trading of shares has presented a fine path towards wealth creation. Many billionaires/millionaires like Warren Buffets, Chris Gardner attributes their success to knowledge of numbers. In Nigeria, trading is taken care of by the NSE, now known as the NGX.

The former Nigerian Stock Exchange (NSE), now Nigerian Exchange Group (NGX) is the oldest trading platforms in West Africa and the second largest in the continent.

Many debates are ongoing, is trading or acquiring shares with this platform profitable as Wall Street?

Online experts are encouraging buying United States shares to Nigerian shares due to many reasons, for instance, the inconsistencies of the forex and recession.

Here we will be investigating in all possible reasons for not trading or buying in the Nigeria Stock Exchange (Nigerian Exchange group) which is the parent company of three subsidiaries: NGX Limited, NGX Regulation Limited, and NGX Real Estate Limited.

Reasons for not Trading or Buying from the NSE (NGX)

• Low level of awareness or knowledge NSE (NGX): Financial literacy, education, and awareness play a great role in enhancing the participation and diversification of investors. Here, potential investors are not even motivated or informed on how to select brokers to invest.
• Lack of trust or confidence in the NSE (NGX) and its regulatory framework: The demutualization of NSE, complex regulation by SEC, and opaque information channels raise concerns of potential manipulations by stakeholders and this deter potential investors from trusting.
• Access or Affordability to the NSE (NGX): Getting access or affording shares is heinous. The knowledge of how to go about with NSE/NGX and its intermediaries such as brokers, custodians, and registrars is difficult. Potential investors are faced with the strain of getting a reliable broker, high costs in opening accounts, settling transactions, or receiving dividends. Poverty is also a reason for the low turnout of investors in the capital market.
• Liquidity or Volatility in the NSE (NGX): Investors are scared of the liquidity or volatility of their shares. The crash of 2008 made Nigerians develop an aversion for the Nigerian stock market due to their past experience. The limitation of converting their shares into cash immediately or receiving dividends from companies also makes investors not flock in.
• Diversification and Growth Opportunity in the NSE (NGX): Unlike the global market, the exchange group are limited in diversifying, with only limited sectors and industries of a total of 155 companies in their listing, and the slow and negative talks of the NSE/NGX and listed companies make potential investors withdrawn from venturing into acquiring of shares.
• Incentives or Benefits for Investing and Trading in the NSE (NGX): Potential investors do not find the NSE/NGX attractive or rewarding enough to invest or trade their money. This is because of the high tax burden or complexity, low dividend yield or capital appreciation, and other lack of incentives or schemes to encourage them.

Conclusion

The progress of Nigeria Exchange Group is in the policies set by the stakeholders and boards. There is a need for improvement so as to attract potential investors to flock into the capital market for shares.