Views Article – Sharenet Wealth

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Trade The World

If you, like many around the globe, have been forced to work from home due to regulations requiring a complete or partial shutdown from late in the first quarter of 2020, then becoming used to communication via electronic means has required a rapid adoption. While the process has been easier for some and harder for others, it may be that the current Covid-19 ‘crisis’ has catapulted humankind into a new dimension through all aspects of life. Until the end of the lock-down, communicating with your non-immediate relatives, friends or colleagues had to be done via electronic means, meaning that companies that provide such services should see a massive demand for their products which should add significantly to their top and bottom lines over the short and medium term while slowly growing long term revenues as we grow to using these products by force or by choice.

In the mid-2000s, searching on the internet later became known as ‘Googling‘ while today, if you intended to message some would you’d say I’ll WhatsApp You or if “I’ll Zoom you” if you prefer a video calls. In the corporate environment, Nasdaq-listed Zoom Video Communications (Share Code: ZM) has played an integral role in driving collaboration between colleagues or service providers and clients. Not only has it been used to check up on a project but it has also been used as a ‘boardroom meeting location’ for large groups of people. Back in January 2020, our offshore research identified Zoom Video Communications as a buy based on an attractive technical chart setup. Whilst we expected the share to find positive momentum, the counter exceeded our expectations by becoming one of the best performing year-to-date. From around $72, the rise has been phenomenal, with the price recently testing a high of $281 – a 290% return in 7 months. 

While South Africa provides a home base for most investors, the JSE is relatively tiny when compared to the global equity market. This 2016 image from the Visual Capitalist highlights 16 global exchanges that were each more than worth $1 trillion at the time, while the second image highlights how 93% of all global stock value is divided between 3 continents. Over the last 4 years this figure has of course grown with equity values rising substantially. In fact, some of the companies listed are themselves worth $1 trillion. 

Whilst local stocks such as Naspers, Sasol and Anglo American Plc provide investors with access to the technology, oil and chemicals as well as the diversified mining sector, investors may be missing out on a myriad of exciting new and emerging sectors on a global stage. Via Naspers, investors have access to Tencent however there are also other Chinese internet stocks such as Alibaba (one of the world’s biggest e-commerce platforms), JD.com (it’s e-commerce competitor) as well as Baidu, which is considered the ‘Google of China’. 

You are also able to access these names via ETFs. Most recently, Satrix launched a China-focused ETF which provides easy access for investors to allocate capital to global stocks such as Alibaba, Ping An Insurance and NetEase.

Satrix MSCI China ETF Top 10 Constituents

On the JSE, FinTech opportunities are quite limited, however, the Nadsaq in New York allows us to access leading companies such as Visa, Mastercard and American Express as well as emerging but dominant payments services providers such as Paypal and Square. These companies have commanded a global presence and have acquired a global customer-base with revenue exceeding the market cap of most of our JSE-listed large cap stocks.

The impact of Covid-19 has been devastating in all aspects with a profit-making attitude seemingly unimaginable during the chaotic period, however, even here one is able to seize potential opportunities. Take for example a share such as Moderna which appeared on our radar as it broke out from a bullish pennant at $64.53. We then saw the stock rally +47% to a high of $95.21 before retreating in recent sessions. On a global stage, access to specialized healthcare and biotechnology firms are only a click away however the JSE provides limited access to such sectors.

The impact of Covid-19 has been devastating in all aspects with a profit-making attitude seemingly unimaginable during the chaotic period, however, even here one is able to seize potential opportunities.

Not only are global stocks available, there is also a wide array of Exchange Traded Funds in offshore markets. Whilst the traditional/vanilla ETFs can be access via the JSE, offshore markets give investors access to niche themes such as Online Retail, Global Infrastructure as well as Country Specific opportunities. Looking for access to Taiwanese, Hong Kong or Mexican equities via ETFs? We’ve got access to those.

If you think clean energy is the future, why not buy a Solar ETF?

If you believe that Sweden’s OMX could be a standout among Scandinavian and European Equities why not buy the iShares MSCI Sweden ETF (EWD) which is also looking to break out of a 20-year consolidation?

Swedish Equities vs The Broader European Market (In USD)

Swedish Equities in US Dollar Terms

If your preference is agricultural commodities, then looking at the Teucrium Funds listed on the NYSE may be an option:

Whichever Stock, Sector ETF, Index, Commodity or Currency you’d like to trade or invest in, Sharenet Securities most certainly has access to the vast majority of instruments. Instead of limiting yourself to a small pool of stocks and ETFs, exploring global opportunities allows a trader and investor to grab hold of nearly any opportunity imaginable.  

Give the Sharenet Securities Dealing Desk a call today on (021) 700 4800 or send us an email at support@sharenetsecurities.co.za to find out how you can access opportunities on a global stage.



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Lester Davids

Investment Strategist

Lester Davids graduated from the Cape Peninsula University of Technology with a National Diploma (Internal Auditing) in 2006. He has worked as a Risk Management Consultant for Old Mutual's Group Schemes Division and as Internal Auditor for multinational professional services firm Deloitte. At Unum Capital he was responsible for in-house tactical and strategic technical analysis research which largely included idea generation for the trading desk as well as the group's client base. In 2020 Lester joined Sharenet Securities fulfilling the role of Investment Strategist responsible for multi-asset class research in both local and offshore markets.