Last updated on
January 18, 2022

A stock is a security that represents the ownership of a portion of a company or corporation. In finance and economics, a security is generally known as a certificate or financial instrument that attests to one’s ownership of a company or corporation.

A stock can also be referred to as ‘equity’. If one owns a stock of a company or corporation, one owns the assets or profits proportional to the worth of the stock they hold. Conventionally, stocks are also referred to as ‘shares’. Ownership in the stock or share of a company or corporation also entails voting power - however, this is not always the case, as certain classes of stock may be sold or given without voting power embedded.

Stocks are publicly sold and/or bought on stock exchanges - there are also stocks that are traded privately. Stock exchanges generally get regulated by governments (predominantly by the respective Security Exchange Commissions (SECs)). In 1602, the Dutch East India Company became the first company in the world to publicly trade its stocks - these stocks were traded on the Amsterdam Stock Exchange, the world’s first Stock Exchange.

Nigerian Context

The first instance of the public trade in stocks in Nigeria was carried out in the Lagos Stock Exchange in June 1961 which itself was formally established on September 15, 1960. In 1977, it became known as the Nigerian Stock Exchange. Today, it is called the Nigerian Exchange Group (NGX). The NGX is regulated by the Securities and Exchange Commission.

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