What Is a Share?
A share is a small piece of a company. If a company is divided into one million shares and you own ten thousand, you own 1% of it. Your shares can rise or fall in value, and the company may also pay you some of its profits.
Share. A share is one equal unit of ownership in a company. Owning shares makes you a part-owner, with a claim on a portion of the company's value and on any dividends its board declares.
What owning a share gives you
A share in a company listed on the Nigerian Exchange (NGX) gives you three things. First, a claim on part of the company's value, which shows up in the share price. Second, a right to any dividend the board declares and shareholders approve — dividends are not guaranteed. Third, a vote at the Annual General Meeting (AGM), in proportion to the number of shares you hold. You do not run the company and you are not personally liable for its debts: the most you can lose is what you paid for your shares.
How a share makes or loses money
You can make money in two main ways. You can sell your shares for more than you paid, or the company can pay you some of its profits. That payment is called a dividend. The company may pay one or pay nothing; the amount and timing vary. You can lose money if you sell for less than you paid. If the company fails, its shares can become worthless. Fees and taxes also affect what you keep.
Why the price moves
On the NGX, buyers and sellers agree the price of a share. Prices change as people react to company results, interest rates, the naira and news. A growing business may become more valuable, but growth does not guarantee a higher share price. Prices can fall even when a company is doing well.
Shares are for time, not for quick money
Share prices can rise or fall over days, months or years. Holding shares for longer gives the business more time to grow, but does not guarantee a profit or that a fallen price will recover. For illustration only, shares bought for ₦500,000 might later be worth ₦700,000 or ₦400,000. These are examples, not forecasts, and exclude fees and taxes.
Where your shares are kept
In Nigeria your shares are held electronically by the Central Securities Clearing System (CSCS) under your Clearing House Number (CHN). There are no paper certificates for new purchases. When you buy or sell, the trade settles one business day later (T+1). If your shares are registered in your own name under your own CHN, they remain yours even if the app or broker you used closes.
Questions
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This page is for general information and educational purposes only. It does not constitute financial advice, investment advice, or any recommendation to buy, sell, or hold any security. The value of investments can fall as well as rise, and you may get back less than you invest. Shares Saver does not provide financial advice.
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