South Africans will be able to ac­cess the S&P 100, Nas­daq 100, Dow 30 and top 50 ex­change-traded funds. But while hold­ing Face­book and Google stock may sound like a good idea, there’s risk in­volved with Don­ald Trump’s volatile pres­i­dency, writes

CityPress - - Business -

If you’ve al­ways wanted to in­vest in US stocks and shares like Face­book, Google or Ap­ple, then you’re in luck be­cause online stock bro­ker EasyEquities is go­ing to of­fer South Africans the abil­ity to do this via its plat­form to­wards the end of July.

To cre­ate some hype and to test the sys­tem, EasyEquities will give in­vestors the abil­ity to play with “Mo­nop­oly” money in the form of a soft launch on July 4, which is In­de­pen­dence Day in Amer­ica. In­vestors will also be given the op­por­tu­nity to say what they like about the of­fer­ing and which shares they are most in­ter­ested in pur­chas­ing.

Upon launch in­vestors will be able to buy into all the ma­jor US “stars”. “For starters in­vestors will be able to ac­cess the S&P 100, Nas­daq 100, Dow 30 and top 50 ex­change-traded funds. There are 7 000 stocks in the US, but we don’t want to in­tro­duce too many to con­fuse in­vestors. How­ever, all the big brands and dis­rup­tive com­pa­nies like Face­book, Google, Ap­ple, Nike and Adi­das are in there in the top list,” ex­plains Charles Sav­age, CEO of EasyEquities.

He adds: “Be­ing able to ac­cess those brands and those com­pany’s for­tunes will be great op­por­tu­ni­ties for South African in­vestors. There are other in­ter­est­ing brands in the US such as Alibaba, who are the Amazon of the Asian mar­ket, and other dis­rup­tors that you wouldn’t oth­er­wise be able to ac­cess in South Africa. While there are a good few com­pa­nies on our ex­changes here there are few that are dis­rup­tors. All these US brands are syn­ony­mous in our daily lives, so it will be nice to share in their suc­cess.”


How­ever, Floris Slab­bert, Ec­spo­nent na­tional dis­tri­bu­tion man­ager, ad­vises in­vestors not to ex­pose them­selves too much to over­seas stocks, point­ing out that you could al­ready have for­eign ex­po­sure with­out even re­al­is­ing it.

“The com­pa­nies that you are in­vest­ing with lo­cally could have in­ter­na­tional ex­po­sure ei­ther in Europe, on the FTSE in UK, or in Amer­ica. With Naspers, you do have in­ter­na­tional ex­po­sure as it has a stake in Ten­cent in China. With stocks like Bri­tish Amer­i­can To­bacco (BAT) you’d have a lot of ex­po­sure to Amer­ica and Bri­tain,” he says.

Alex Funk, CEO of Cinnabar In­vest­ment Man­age­ment, con­curs, adding that over half of the Top 40 stocks on the JSE are dual listed, which means you are earn­ing div­i­dends in dol­lars. “Sim­i­larly, 35% of the com­pa­nies in the prop­erty in­dex have their main list­ing off­shore, with an in­ward list­ing on the JSE. In other words, these on­shore in­vest­ments are in ef­fect rand hedges be­cause their in­come is earned off­shore,” he says.


Pres­i­dent Don­ald Trump has al­ready said and done things that have had a di­rect im­pact on the value of shares listed in the US. So while hold­ing Face­book and Google stock may sound like a good idea, there’s risk in­volved.

“Just to give you an idea, there was a pre-crash of al­most 8% on one day when he did his first ex­ec­u­tive or­der on ban­ning peo­ple from some coun­tries from com­ing in and out of the coun­try,” points out Slab­bert. As a re­sult of Trump’s ac­tions, Ap­ple’s and Google’s CEOs had to dis­tance them­selves. In­vest­ment guru and Berk­shire Hath­away CEO War­ren Buf­fett re­futed Trump’s im­mi­gra­tion pol­icy in his an­nual let­ter to in­vestors. “If Trump goes to war it could have a big im­pact on all of the stocks, and by the time you’ve wo­ken up from your sleep you could lose out, so don’t over­ex­pose your­self. Bear in mind that there may also be cheaper stocks lo­cally,” says Slab­bert. While some US stocks can be ex­pen­sive, the EasyEquities plat­form pro­vides the op­tion of buy­ing frac­tion shares through EasyEquities. “The av­er­age South African can’t buy Amazon at $900 (close to R11 800) but at $10 (R130.77) they can,” says Sav­age. Over­all, Slab­bert be­lieves US stock of­fer­ing presents a good op­por­tu­nity. He ad­vises in­vestors not to put all their eggs in one bas­ket and in­vest for the long term to ride out any volatil­ity, which is bound to oc­cur con­sid­er­ing Trump is at the helm.

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