How to Invest in South African Stocks — from Main Street, USA

Setting up African brokerage accounts isn’t a whole lot of fun. In fact, it can be downright tedious.

So I try to avoid the process as much as possible and content myself with the ever-expanding universe of South African stocks available in the form of ADRs, ETFs, and OTC listings.

But the vast majority of South African stocks don’t trade anywhere outside of the Johannesburg Stock Exchange (JSE). Some of these companies trade at bargain prices and conduct business across the continent – making them compelling opportunities.

Lazy investors like me can now trade these stocks without opening a foreign brokerage account. Three US-based discount brokers – Everbank, Fidelity, and Schwab – offer their customers direct access to the South African stock market.

Presently, none of these brokers offer online trading on the JSE, but the process of buying and selling shares is straightforward. You simply call them up, and place your trade through a live, human broker. If the JSE is open, your trade will take place in real time. If it isn’t, the order will be executed first thing on the next trading day.

Photo by Keso

Here are the details of each broker’s offering:

  • Evertrade offers the most accessible fee structure of the trio. They charge a commission of $35 per trade plus any South African taxes and settlement fees. No minimum trade amount is required.
  • Schwab charges either $100 per trade or 0.5% of the total trade amount – whichever is more. On top of this, they collect a 1.55% “mark-up fee,” which covers local taxes and pass-thru charges from their South African broker partner. Their minimum trade amount is $5000. A trade of that size will set you back a total of $127.50 in the form of commissions and fees.
  • Fidelity’s commission is $32.95 plus a $50 settlement charge. Their South African partner also charges a .71% mark-up fee to cover currency conversion and local taxes. Note, too, that Fidelity requires a hefty minimum trade amount of $50,000. So, Fidelity customers should expect to shell out at least $437.95 worth of commissions and fees per trade.

As you can see, commissions of this size will add up in a hurry. So, unless you plan to buy and hold a small number of South African stocks, it probably makes more sense to open an account with a South African broker – a process that we’ll cover in a future post.

Do you trade South African stocks through any of these brokers? Or do you have an account with a South African broker? I’d love to hear what your experience has been with them. Tell us about them here in the comments or drop me a line in the contact form.

Related Reading

18 South African Stocks That Trade On Wall Street
African ADRs
Invest in South Africa the Easy Way

 

 

 

 

6 thoughts on “How to Invest in South African Stocks — from Main Street, USA”

  1. Probably not the place for this question, but can a South African use any of those brokers to trade in US shares?

    1. US brokers don’t make it very easy for non-US citizens to open trading accounts, but it is possible. I suggest trying Schwab, TDAmeritrade, or ETrade. Good luck and please let us know what you find out.

  2. Some of these discount brokers don’t accept people from specific countries, any recommendation on discount brokers that accept Nigerians would be much appreciated, someone recommended interactive brokers which I tried but they don’t

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