Benefits Of Investing In Shares

This represents the curiosity in your funding after a yr. 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 power be entitled to N10, 000 if you happen to mortalal 10,000 items of Zenith Financial institution shares. The N10, 000 will probably be posted to you as a dividend warrant (web of withholding tax).

I learn the story of a mortal who bought a dividend of 4 million naira from the dividend paid out by First Financial institution Nigeria inside the yr 2006.This man had 4 million items of First Financial institution shares as at 2005 when the mortal retired. All his working years, he didn’t spend money on one other inventory still First Financial institution shares and Union Financial institution shares. In the yr 2006 when First Financial institution Nigeria gave a bonus of 1 for one (1:1) that’s apiece share you have they provide you one other one. The full shares the mortal has was double to 8million items. First Financial institution additionally declared a dividend of N1 per share, so the noncurrent man went abode with N4, million dividends. Regardless of the place you are actually, businessly, you may make it via the Nigerian inventory market. You possibly can construct your wealth via the market.

Benefits Of Investing In Shares

Bonus Shares

These are further shares dead paid out of firm’s militia for current buyers commensurate their current holding inside the firm.


Yr – shares closely-held – 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 case you had endowed twenty thousand naira (N20,00) in 1992 to purchase 10,000 items wanting on the bonus historical past until date reveals that it will likely be value over twenty-eight million naira as at march,2006 when First Financial institution shares was bought for N72. In addition, 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 ideal compounding!

Capital Appreciation

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

Worth 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 bought for N76 as at march 2003 and the very best value in 2006 was N254.1 which implies 10,000 items of Nestle shares in March 2003 at N76 per unit will probably be value N760, 000.In case you now determine to unload 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 power be already a millionaire. Remember that you simply entirely endowed N760, 000 in shopping for the shares. You are actually making a acquire of over N1.7 million naira. What a wise approach to earn a living and have your cash be to a T for you.

Collateral for mortgage

Your shares can be utilised as collateral to acquire mortgage from the business institution. Must you want mortgage for capital venture or to increase your enterprise, your shares would possibly simply be all you could get via the ache of infinite seek for cash.

Defend your cash from inflation

Your funding inside the inventory market is a way of defensive your cash from the ravages of inflation. Your cash can maintain working for you with out depreciative in worth.

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