As oil prices head downhill driven by a trade war between Saudi Arabia and Russia, saving and investing your money in a different currency other than the naira is one major way to hedge – protect – your investment against a possible devaluation.
The OPEC+ meeting broke last Friday without a deal. This sent oil prices into a freefall. During the mid-day trading on Friday, Brent was down about 9 percent and rapidly headed to the low of $40s.
Following the free fall, the Nigerian Stock Exchange All-Share Index opened on a choppy note on Monday. The naira as of Tuesday is also exchanging the dollar at N367 from N360 in early signs of depreciation.
In February, BusinessDay published a story on three mobile platforms that help users invest their money in foreign assets. This is a followup from the story which has received a lot of interest. We have repeated two of the start-ups with additional information.
Trove
Founded in 2018, Trove is a mobile app designed to help users invest in stock markets, bonds, exchange-traded funds (ETFs) and other securities directly from their smartphone. There are various stock market options available for users including Nigerian, US, and Chinese equities.
After downloading the app either on the Play Store or iOS and providing all the necessary information, a user requires a minimum of $10 (N3,670 on the current exchange rate) to start investing.
The platform works by partnering with financial services providers such as Verve, Paystack, 213 Capital, Mastercard and Visa to make access to the market seamless.
Users’ personal information is secured with the use of 256-bit encryption. DriveWealth LLC, a self-clearing broker in the US is a regulated member of FINRA/SIPC and holds all the US trading accounts on Trove. It also protects securities holdings of its members of up to $500,000 (including $250,000 for claims for cash).
Chaka
Founded in 2019 by Tosin Osibodu, Chaka is a seed-stage company that allows its users to invest in stocks listed on the US stock exchange as well as blue-chip companies in over 40 countries across the world.
Like Trove, stock purchases on Chaka are facilitated through DriveWealth and Citi Investment Capital and regulated by the US Financial Industry Regulatory Authority (FINRA) and the US Securities and Exchange Commission.
Investors can get started with as little as 1,000 Naira, or $10, to create a local and global wallet to trade. Chaka’s fee structure is 100 Naira (or 0.5%) for local trades and $2.00 (or 1%) for global trades.
Risevest
Until November 2019, the mobile investment platform was known as CashEstate. Following its rebrand, Risevest, founded by Eleanya Eke and Bosun Olanrewaju, became a holistic wealth management app with a community that offers financial guidance and long term investing.
On the new Rise, users could become owners of global businesses with as little as N3,670 being the exchange for a $10, within a few minutes of being verified.
Investment options on the Rise mobile app include US real estate, US Stocks, US Venture Capital, and Fixed income. Users can also earn between 13 and 15 percent interest on their annual investments and half of that if they chose the 6 months tenure.
Bamboo
Bamboo investment platform is specifically for buying and selling top stocks, exchange-traded funds (ETFs) and American depository receipts (ADRs) in the United States.
Like Trove and Chaka, foreign investing in Bamboo is facilitated by DriveWealth while local stocks trading is made possible by Lambert Capital, a licensed Nigerian stockbroking firm.
The company is backed by Chrysalis Capital, an investment management firm in Nigeria that focuses on seed and series stage technology startups.
While these platforms could make your dream of trading in foreign assets possible, experts have also advised caution. With the outbreak of coronavirus and subsequent lockdown of most advanced financial markets, the risk of a global recession is heightened. Markets are experiencing shocks, hence stable currencies such as the dollar are not immune to wild shocks. So do your due diligence before making your investment decisions.
