A new online trading platform makes it possible to trade shares across the world

Do you want to invest in companies that make all the cool stuff you use like Apple, Google and Facebook? The launch of a new global trading platform makes it possible for South Africans to trade directly in 13 000 shares across 30 international markets and exchanges around the world from New York to London, Europe, Hong Kong, Beijing and Australia.

Since the announcement by Facebook that it plans to list in the US in next few months, many readers have asked how they can invest as South Africans. Facebook is set to list in the US in May making it the largest ever internet listing. It plans to raise $10 billion through the public offering, placing the value of Facebook at around $100 billion.

Whether or not Facebook is actually a good investment is debatable as many argue it is simply too expensive and will therefore be unlikely to provide a good return. However the interest by the public, many of whom have never considered share investing before, is driven by the fact that people like investing in “cool” products that they use and understand. Facebook is just one of hundreds of global brands that people identify with and the recent launch of an online global trading platform in South Africa makes it that much easier to invest in them.

Saxo Capital Markets, a subsidiary of the Danish Saxo Bank recently launched SaxoTrader an online trading platform in South Africa which provides South African online traders the opportunity to invest directly in a variety of shares and financial instruments across the world, as well as locally here on the Johannesburg Stock Exchange.

The platform allows investors to trade normal shares as well as derivative instruments like single stock futures and CFD’s (contracts for difference) as well as foreign currencies, so it is a one stop shop for people who want to trade various instruments both internationally and locally.

The platform is aimed at traders rather than investors, in other words people taking a short-term view of the markets and who want to trade regularly rather than a buy and hold strategy. That does not mean you can’t hold a portfolio of shares, it is just that the advice is not geared in that direction and the tips, advice and research will be geared for short-term trades.  However Saxo Bank has created a portfolio product offering which will be made available in South Africa later this year and will be geared to long term portfolio management.

SaxoTrader has won awards internationally for its innovation and level of support for traders as well as its trading and charting tools. The platform provides daily trading recommendations via daily emails as well as on their website. This will contain detailed information such as the target price when buying the share as well as the recommended exit price via its trading tool “Trade Maker”. It not only tells you the recommended buying and selling price but also what percentage of your portfolio you should commit to the trade.

The site also has a comprehensive stop loss system so that the position will be closed at a set price preventing further losses, this is particularly important for derivative trades such as CFD’s and futures where losses can be unlimited. Clients will also be able to access value-added services such as live prices and real-time conversations with professional traders.

As this is a purely online platform it does not offer a full service brokerage and all advice or recommendations are provided electronically, however there is a support centre for technical assistance and you are able to log questions which will be answered by experts. As offshore trading and financial instruments such as derivatives are higher risk, this platform is aimed at the more experienced trader rather than a novice and you need R50 000 to open an account.

This will be a limitation in terms of the number of existing traders in South Africa’s market, however Saxo Bank’s co-founder, Lars Seier Christensen says the company is aiming to grow the market through education. “The one way to make a market grow is to educate people. We have a direct responsibility to make sure they understand the product,” says Christensen. Saxo Bank will be conducting free seminars and webinars as well as providing extensive education tools on the site.

Investors will also be able to first open a simulation trading account which allows you to simulate a trading experience until you are comfortable investing real money. Christensen says the company will make it clear that this is not a get rich quick opportunity and that there is real risk involved which means it is not always suitable for everyone.

The platform also allows you to trade local shares and financial instruments however under the Financial Services Board (FSB) license they are not permitted to provide research or trading tips on South African stocks.

How it works:

·You register on the website www.za.saxomarkets.co.za (Note that www.sa.saxomarket.com  is not the correct site but an advertising site)

·You will need R50 000 to open an account

·You will need to provide the usual FICA documents

·If you are going to trade internationally this will form part of your foreign investment allowance and you will have to transfer money offshore. South Africans may invest R4 million per year with Reserve Bank approval or R1 million per year without Reserve Bank approval although you will have to obtain an authorised dealer form from your bank

·Costs vary depending on which exchange you are trading on, however based on their South African costs of R100 minimum fee and 0.35% trading fee it is in line with other providers.

This article by Maya Fisher-French was first published in City Press