Trade in foreign stocks now online

7/28/2010 12:40:01 PM

ALISTAIR ANDERSON

Contributing Writer

Insurance and investment services provider Sanlam yesterday launched a service that lets customers trade foreign shares online.

Sanlam iTrade would enable investors to be exposed to securities available on 16 international stock exchanges.

South African investors have normally had to comply with exchange procedures, including the opening of accounts overseas, to be able to trade in foreign markets.

Gerhard Lampen, head of Sanlam iTrade, said the service was one of the most advanced trading platforms available.

“Clients will be able to trade shares, currencies, commodities and exchange-traded funds, among other instruments,” he said.

Mr Lampen said it was the right time to launch offshore trading to investors because exchange controls on individuals would be abolished in the next 12 months.

“Currently, South Africans can invest up to R4m offshore, but there is very little stopping government from lifting these controls on individuals as very few people made use of this allocation,” Mr Lampen said.

The JSE’s recent launch of single stock futures on foreign equities may be a precursor to lifting the controls.

“In view of the strong rand, it is prudent to invest between 20% and 30% of a portfolio in international markets. Investors need to hedge against those things they can’t foresee.”

Old Mutual Investment Groups’ Peter Brooke also said yesterday that his research had found investors needed to focus more of their asset allocations on equities than on bonds and cash. He had forecast average real returns of 6,5% on domestic equities and 7% on foreign equities over the next five years.

andersona@bdfm.co.za