- By Michael Gary
Investor-led and casual trade has been on the rise for several years across the world, but now it’s really picking up in Africa and its 54 countries. Different types of trade are gaining traction in different ways, and of course there are differences between countries. Here are some popular investment options for African investors.
Forex is the trading of foreign currencies and it has seen a resurgence in popularity in Africa. Over the past couple of years, amid volatile exchange rates around the world, many laymen have turned to the forex market as a way to get involved in trading. Forbes noted that increased internet and smartphone access among citizens has also contributed to the boom in the sector.
They estimated that in 2020, forex trading grew by around 200% throughout the year. The majority of this interest has come from online trading and brokerage platforms, providing traders with an accessible way to get involved. A wealth of free information is available online for traders to help them understand how the markets work.
Index trading is where groups of stocks grouped together in an index are traded like any other commodity. For example, a trader may want to invest only in technology stocks, manufacturing stocks, or groups of certain commodities like metals or grains. These assets would then be aggregated into an index which is then traded by the investor. Indexes can also be formed based on region and value. Popular examples include FTSE100, DAX and IBEX 35, although there are many, many more.
This type of trading is gaining ground across the world as it allows traders to speculate more broadly on the assets that interest them. Also, it is less volatile than some other forms of trading because you are trading the value of an entire group of assets, rather than just one. At the African level, there are different indices, such as Kenya NSE 20, Nigerian NSE 30 and NSE All-Share, and many others.