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Benefits Of Investing In Shares

This represents the curiosity in your funding after a 12 months. In 2007,First Financial institution Nigeria gave a dividend of N1,Zenith Financial institution gave a dividend of N1, whereas Flour Mill Nigeria gave a dividend of 90k.
For instance, as Zenith Financial institution declares a dividend per share of N1, it means you might be entitled to N10, 000 for those who personal 10,000 items of Zenith Financial institution shares. The N10, 000 can be posted to you as a dividend warrant (internet of withholding tax).

I learn the story of a person who received a dividend of 4 million naira from the dividend paid out by First Financial institution Nigeria within the 12 months 2006.This man had 4 million items of First Financial institution shares as at 2005 when the person retired. All his working years, he didn’t put money into one other inventory however First Financial institution shares and Union Financial institution shares. Within the 12 months 2006 when First Financial institution Nigeria gave a bonus of 1 for one (1:1) that’s for each one share you could have they provide you one other one. The whole shares the person has was doubled to 8million items. First Financial institution additionally declared a dividend of N1 per share, so the outdated man went residence with N4, million dividends. Regardless of the place you at the moment are, financially, you may make it by means of the Nigerian inventory market. You may construct your wealth by means of the market.

Bonus Shares

These are additional shares totally paid out of firm’s reserves for present buyers in proportion to their present holding within the firm.


12 months – shares owned – bonus ratio – free shares – new shares

1992 10,000 items – – 10,000 items
1993 10,000 items 1 for 3 3,333 13,333 items
1994 13,333 items 1 for 1 13,333 26,666 items
1995 26,666 items 1 for 4 6,666 33,332 items
1996 33,332 items 1 for 4 8,333 41,665 items
1997 – – – –
1998 41,665 items 1 for 4 10,416 52,081 items
1999 52,081 items 1 for 4 13,020 65,101 items
2000 65,101 items 1 for 4 16,275 81,376 items
2001 81,376 items 1 for 4 20,344 101,720 items
2002 101,720 items 1 for 4 25,430 127,150 items
2003 127,150 items 1 for five 25,430 152,580 items
2004 152,580 items 1 for 8 19,072 171,652 items
2005 171,652 items 1 for six 28,608 200,260 items
2006 200,260 items 1 for 1 200,260 400,520 items

In 1992 the shares of First Financial institution was N2.In the event you had invested twenty thousand naira (N20,00) in 1992 to purchase 10,000 items trying on the bonus historical past until date reveals that it is going to be value over twenty-eight million naira as at march,2006 when First Financial institution shares was offered for N72. As well as, the bonus historical past reveals that the ten,000 items of First Financial institution shares purchased in 1992 have elevated to 400,520 items. What an excellent compounding!

Capital Appreciation

You take pleasure in capital appreciation because the market value of the shares purchased will increase. Within the final two years, the costs of shares on the ground of the Nigeria inventory change have witnessed large progress. In 1992, First Financial institution was N2 and within the first quarter of 2006, it moved to N72.What nice improve. Japaul oil & Maritime was 0.99k in December 2006 and by October 2007, it rose to N6.02k.

Value Motion Evaluation for five years

2003 – 2007
R.T. brisco N2.8 N32
G T Financial institution N5.2 N36.19
U A C N N4.1 N40.19
Glaxo -Smith -Kline N3.3 N23

Nestle Nigeria shares was offered for N76 as at march 2003 and the best value in 2006 was N254.1 which suggests 10,000 items of Nestle shares in March 2003 at N76 per unit can be value N760, 000.In the event you now determine to dump when the worth was N254.1 in 2006, you’ll be promoting for N2, 541,000.That’s, 10,000 x N254.1 =N2, 541,000.You’re already a millionaire. Remember that you simply solely invested N760, 000 in shopping for the shares. You at the moment are making a acquire of over N1.7 million naira. What a sensible technique to generate profits and have your cash give you the results you want.

Collateral for mortgage

Your shares can be utilized as collateral to acquire mortgage from the financial institution. Do you have to want mortgage for capital venture or to broaden your small business, your shares would possibly simply be all you might want to get by means of the ache of countless seek for cash.

Shield your cash from inflation

Your funding within the inventory market is a way of defending your cash from the ravages of inflation. Your cash can preserve working for you with out depreciating in worth.

Source by Adedayo Emmnanuel

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