Nigerian Stock Market: The Impact of Information Technology

The Nigerian capital market was not popular during the military rule; that was the time when very few rich people reaped the benefits of the stock market. Most Nigerians were unaware of the Nigerian stock market. With the advent of democracy, radical changes took place in the field of telecommunications and later a restructuring of stock operations was carried out.

The big change it brought was live trading on computers and trades being credited to investors’ accounts within four days. This revolutionary change brought transparency to the sector. More and more Nigerians at home and abroad became involved in the activities of the Nigerian stock market. The use of information technology also helped curb fraudulent schemes by issuing houses.

The Central Securities Clearing System was introduced, which monitors the activities of the stock exchange in a computerized environment that displays all transactions and thus provides all investors with a fair trading system. With the launch of the Automatic Trading System the automation of NSM was realized. Subsequently, e-bonus, e-allotment, e-dividend and e-IPO were introduced and implemented. GSM operators had a big effect in increasing the credentials of this sector. In 2006, a telephone alert program was introduced which increased investor confidence in the Nigerian Stock Exchange Commission.

The impact of Information Technology would be incomplete without mentioning the effect of the Internet. The internet has added to the transparency and means of investing in stocks as one can use the online facilities to be a part of the daily transactions in stock trading. Also, you can have the complete information about the stock index, volume and value of the traded shares.

With so much information technology coming into trading and information about the Nigerian stock market, all investors need to be aware of how to use it for maximum benefits in terms of getting the most out of it. This is just a piece of information for potential investors to know how best to maximize their potential in the Nigerian stock market.

However, the impact of technological advancement has contributed greatly to the development of this unit of the economy, so investors could take advantage of the extreme low drop in share prices to build a portfolio of investments in Africa’s largest capital market, as this complies with the buy low sell high principle that is the anchor of feature trading anywhere in the world.