There are a couple of international brands that I would like to buy shares in, but to do so I would have to access local markets. One of the brands is listed in New Zealand and the other in Singapore. As someone new to the concept of buying stocks, what is the best way of investing in these companies from here in the UAE? PD, Abu Dhabi
The expert advice
Adel Merhab, managing partner of tradeyourmarket.com
The financial world has never been as interlinked as it is today. The advancement of technology has allowed for easy and swift connections between international financial markets.
One of the prime beneficiaries of this technological advancement is that brokerage companies can now offer access to a large number of international financial markets from a single online platform.
A brokerage acts as the intermediary between a stock exchange – or any other type of exchange that facilitates the trading of financial securities – and the investor or trader.
The process is fairly simple. Investors can open accounts with licensed brokers in any market just as they would at a typical bank. Once accounts are open and funded, investors can then execute buy and sell orders of stocks and other financial instruments through their designated brokers.
In the old days, buying stocks in different markets meant that investors needed to open accounts with multiple brokers since a typical broker would focus on only one or a few markets at that time.
Moreover, the process of opening accounts previously involved a lot of paperwork, and buy and sell orders were placed over the phone, making the process all the more complicated for the investor.
Fortunately, things have become far simpler since then. Most brokers now provide access to multiple financial markets through:
1. A single online trading platform with access to most if not all major financial markets in the world
2. Online account opening forms
3. Online and application-based execution of buy and sell orders
In their attempt to compete for business, brokerage companies across the globe have exerted tremendous efforts in trying to become a one-stop shop for investors. And it’s all online.
This does not mean that the top brokers are able to offer access to every single financial market in the world, but they are largely able to provide access to the majority of actively traded markets in the world.
For example, Singapore is a market that is covered by many of the top online brokers given its significance as a key Asian market. On the other hand, the limited demand for trading New Zealand stocks by international investors means that it is unlikely to be offered by one-stop brokers.
Still, access to any specific market, such as New Zealand, is possible by simply setting up an account with one of the online brokers based in the country.
All investors have to do these days is search for the list of top online brokers and the markets they cover and make their pick.
The reader’s advice:
Kyle Dawson, Dubai
As a UAE-based expat I have been investing in the New Zealand stock exchange for the last 13 years through a New Zealand-based online broker. However, as a New Zealand passport holder this has been made a lot easier as I have an address, a tax number and a local bank account, all of which are requirements for the online multiple-market platform that the brokerage provides.
I am uncertain if these requirements are essential for all brokerages (or all platforms they provide), but they have definitely made it far more efficient when undertaking dealings throughout the Australasian markets, especially when initially depositing and eventually repatriating funds.
On another front, it is pleasing to see an investor recognising the existence of a quality New Zealand brand that I feel are very limited in number on the international stage.
Next month’s money clinic:
I am a professional working for a law firm In Dubai. By way of investment, I am interested in buying shares/stocks of companies in the UAE.
I am new to this concept and would like to know more, such as where I should go and whom I should approach for this. Could you please let me know? MA, Dubai
Every month The National features a reader's personal finance problem. If you have an issue or would like to suggest a solution for another's reader's concern, write to pf@thenational.ae
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Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
What are NFTs?
Are non-fungible tokens a currency, asset, or a licensing instrument? Arnab Das, global market strategist EMEA at Invesco, says they are mix of all of three.
You can buy, hold and use NFTs just like US dollars and Bitcoins. “They can appreciate in value and even produce cash flows.”
However, while money is fungible, NFTs are not. “One Bitcoin, dollar, euro or dirham is largely indistinguishable from the next. Nothing ties a dollar bill to a particular owner, for example. Nor does it tie you to to any goods, services or assets you bought with that currency. In contrast, NFTs confer specific ownership,” Mr Das says.
This makes NFTs closer to a piece of intellectual property such as a work of art or licence, as you can claim royalties or profit by exchanging it at a higher value later, Mr Das says. “They could provide a sustainable income stream.”
This income will depend on future demand and use, which makes NFTs difficult to value. “However, there is a credible use case for many forms of intellectual property, notably art, songs, videos,” Mr Das says.
PROFILE OF INVYGO
Started: 2018
Founders: Eslam Hussein and Pulkit Ganjoo
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Sector: Transport
Size: 9 employees
Investment: $1,275,000
Investors: Class 5 Global, Equitrust, Gulf Islamic Investments, Kairos K50 and William Zeqiri
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Will the pound fall to parity with the dollar?
The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.
Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.
New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.
“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.
The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.
The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.
Bloomberg
Most F1 world titles
7 — Michael Schumacher (1994, ’95, 2000, ’01 ’02, ’03, ’04)
7 — Lewis Hamilton (2008, ’14,’15, ’17, ’18, ’19, ’20)
5 — Juan Manuel Fangio (1951, ’54, ’55, ’56, ’57)
4 — Alain Prost (1985, ’86, ’89, ’93)
4 — Sebastian Vettel (2010, ’11, ’12, ’13)