How to Buy Stocks in South Africa – With 0% Commission

South Africa is trying to rise as an emerging market that has been benefited from the increased demand for its commodities and the measures taken by central banks to not let economies in lockdown and major corporations fall apart with the current covid-19 pandemic. 

Nevertheless as said before, the stock market is growing at a good pace in South Africa, and the development of trading platforms like Capital.com, Libertex, and Plus 500, considered right now as one of the best stock brokers in South Africa in terms of low commissions, are improving the global market in terms of buying stocks. Here is a guide on how to buy stocks in 2023 in South Africa.

How to Buy Stocks in South Africa – Quick Steps

This step-by-step walk-through of how to buy shares is based on one recommended, regulated stockbroker Capital.com, albeit, the process as the steps remain constant to most brokers where you could make a share purchase in less than 10 minutes.

So, you need to follow the next steps to buy stocks:

1. Open an Account with Capital.com by visiting its website and clicking the ‘Register’ button. Upon clicking it, you will be asked to enter some personal information (your full name, home address, date of birth, and contact details). You will also need to choose a username and a strong password.
2. Upload ID through the upload of a couple of verification documents (a copy of your South African passport or driver’s license and a recent copy of a bank account statement or utility bill).
3. Deposit Funds once you uploaded the aforementioned documents. You will be asked to make a deposit. Right now the supported payment methods are including debit cards, credit cards, and South African bank transfers. By using Capital.com you have a minimum deposit policy of only €20 and with that deposit, you will have the freedom to buy shares in over 3.000 companies from several international exchanges.
4. Buy Shares as soon as your deposit has been processed (which is instant apart from a bank transfer that could be processed in one or two days), when you can then buy some shares. If you want to browse the many different markets offered by Capital.com, click on the ‘MARKETS’ button followed by ‘SHARES’. Alternatively, if you have a particular company in mind, enter it into the search box and click on the company of your liking.

Step 1 – Choose a Stock Broker

1. Capital.com – Overall Best Stock Broker

Capital.com was founded in 2016 operating right now in over 50 countries worldwide. Their main aim is to provide their clients with the ability to trade in CFDs (Contract for difference – is a sort of financial derivative that allows you to trade market price movements without owning the underlying product, as previously stated) and other derivatives on Forex pairs, stocks, commodities, and numerous other indices, prioritizing the leverage of artificial intelligence within its platform in assisting with ongoing education and decision-making optimization.

This is a relatively new online stock broker that’s quickly become one of the most popular places to invest in shares in South Africa. This is largely because it offers a fantastic range of 2,400 share CFDs with some of the lowest spreads on the market. There’s no commission to worry about either.

This broker is an excellent choice for beginner traders thanks to its fantastic educational resources, including courses, webinars, and an educational app dedicated to help you learn about the stock market providing news and market analysis including improvements in the trading behavior of the user and providing custom suggestions.

In terms of regulation, Capital.com is licensed by numerous bodies, including the FCA and CySEC, so it’s a very secure and trustworthy broker. The minimum deposit is just €20, €250 for bank transfer and you can deposit with a debit/credit card, bank transfer, or Apple Pay.

Capital.com fees:

75.26% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

2. Libertex – Stock Broker with Zero Spreads

If you’re looking to speculate on the price movements of underlying assets such as forex, then Libertex is a brand that you need to check. Entered operation in 1997 and has been offering CFD trading services to its clients ever since. It has over 20 years experience of financial market and online trading experience with over 250 tradable assets via CFDs amassed just under 2.2 million clients worldwide, covering both casual traders and active seasoned investors.

Libertex offers two trading platforms for its customers to choose from. Libertex’s proprietary web trader platform is excellent for novice traders looking for a simple online trading platform with no complicated technical features. Advanced investors with a lot of trading knowledge, on the other hand, can use the popular MetaTrader trading suite to automate their trading with technical indicators, customizable charts, drawing tools, and Robo-advisory services. 

When it comes to tradable assets you need to keep in mind that trading on Libertex is not the same as traditional investing. In other words, you do not own the underlying asset. Instead, you trade CFD derivatives on the fundamental price of an asset like forex, stocks, ETFs, commodities, and more. 

Depositing funds is easy with Libertex. You’ll find a wide range of payment methods at your disposal including credit cards, debit cards, e-wallets, and bank transfers SEPA/International bank wire transfers, Skrill, Neteller, and more. There are no deposit fees and your funds are credited to your account instantly except for wire transfers that take between 3-5 days.

Libertex fees

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

3. AvaTrade – Advanced Trading Platforms to Buy and Sell Shares

It is a more in-depth trading platform for share trading in South Africa. With this software, you can build custom strategies, backtest against historical price data, and much more.

This broker also offers its trading platform for web and mobile devices and can help you with a built-in news feed and analysis tools for figuring out what stocks are worth buying.

AvaTrade is a CFD broker, so you can’t buy shares outright. However, the broker offers access to over 600 stock CFDs. 

This broker is regulated by the FSCA in South Africa as well as by regulators in Australia, Japan, and Ireland. All clients receive negative balance protection, which is a huge plus if you want to trade with leverage. Plus, support is available 24/5 and you can open an account with just $100.

AvaTrade fees

71% of retail CFD accounts lose money with this provider.

4. IG – Trusted Stock Broker Platform with Access to the JSE

IG is a UK-based brokerage firm with over 178,000 clients across dozens of countries – including South Africa. This platform offers share dealing services and CFD stock trading facilities where you can gain exposure to the South African financial markets from the comfort of your home with the option of buying and selling positions accessing leverage facilities. 

This platform provides home-­grown mobile apps for iOS and Android that can also be loaded on tablets and has basic features including customized watchlists, price alerts, and technical charting. The IG Community site has active forums and numerous trade picks through forum entries and blog posts that can offer tips to access a wide range of markets and superior research with the help of a client education experience.

It is important to know that you can fund your account with a South African debit card, credit card, or bank account but by using a credit card you will have a fee of 0.5% charged on MasterCard deposits, and 1% with Visa. 

IG fees

Your capital is at risk

5. Pepperstone - Reliable Broker Platform for Profesional and Amateur Traders

Pepperstone is a CFD and forex broker, which offers trading solutions that meet the requirements of professional as well as amateur traders with the use of trading and virtual tools to help the user to invest as well as possible. Established in 2010. It has its headquarters in Melbourne, Australia, and counts with offices in London, Bangkok, and Dallas.

Pepperstone aimed to offer lower spreads, fast execution, and high-quality service which have reached a good amount of customers in more than 188 countries all over the world, offering only two market-execution accounts which you can access through a user - friendly software plus a mobile app for iOS and Android. This platform also offers an education and analysis center, where trading videos, webinars, and numerous research tools are available for all to accommodate various levels of traders whether you are experienced or a beginner. 

Pepperstone fees

Your capital is at risk

6. FXTM - Regulate Trading Platform with Accessible Trading Options

FXTM is a regulated broker that operates in South Africa. They were founded in 2011 in Cyprus and have more than 1 million registered users with financial regulators in the UK and Cyprus. In South Africa, they are licensed by the local regulatory authority Financial Sector Conduct Authority (FSCA) which means that it is safe to trade with them.

Their main core of FXTM is based on reliable trading conditions and detailed education bringing trading across the world with its accessible trading options, regardless of the trader’s knowledge. You can fund an account or send money by the use of credit cards, bank wire transfers, and even E-wallets using digital elements like computers and mobiles to access your account, see your investment, and plan your movements with educational tutorials in a customer-friendly app where you can choose a trader based on your goals, trading style, desired profitability, and risk level copying transactions of several managers to minimize risk and select an effective strategy. 

FXTM fees

Your capital is at risk

Stock Brokers in South Africa - Fee Comparison

Step 2 – Research on Stocks Investing

What is a Stock?

It is a type of investment that represents a small piece of a company usually called a share. This entitles the owner of the stock to a proportion of the corporation's assets and profits equal to how much stock they own by buying shares that they think will go up in value over time.

For companies, issuing stock is a way to raise money to grow and invest in their business, meanwhile for the investors, stocks are a way to grow their money and outpace inflation. Public companies sell their stock through a stock market exchange (Nasdaq) and the investors can then buy and sell these shares among themselves through stockbrokers. 

The stock exchanges track the supply and demand of each company's stock, which directly affects the stock's price. Stocks are bought and sold predominantly on stock exchanges and are the foundation of many individual investors' portfolios. These investments can be purchased from most online stockbrokers, and the transactions have to conform to government regulations that are meant to protect investors from fraudulent practices. 

Best South African Stocks

•   Gold Fields Limited - A South African mining giant (gold producer) 
•   Naspers - Television and press service company based in South Africa
•   British American Tobacco - Leader in the tobacco industry with a high demand for products in Africa.
•   Tesla - Famous electric car brand headed by the South Africa-born Elon Musk 
•   Anglo American Plc - A mining global company (copper and iron producer mainly in South Africa)

Stocks Fundamentals

They are key metrics for a company, such as cash flow, return on assets, conservative gearing, history of profit retention for funding future growth, and the soundness of capital management for the maximization of shareholder earnings and returns. This involves looking at any data which is expected to impact the price or perceived value of a stock. Fundamentals can include measurable, quantitative data (such as cash flow and debt-to-equity ratios) as well as qualitative, situational factors (such as the business model and competitive advantage). 

It can be challenging to conduct fundamental analysis since it requires digging through financial statements to determine when the stock price is incorrect. Using fundamental analysis, you can create a portrait of a company, identify its intrinsic value and buy or sell the stock based on that information. Fundamental analysts use a stodgy approach to analyzing stock performance. A variety of factors are considered to determine a stock's performance. Among them are the industry overall, the competition, a company's management structure, income, and revenue, as well as its growth potential.

75.26% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

What Are Dividends in Stocks

Dividends are regular payments of profit made to investors who own a company's stock (stockholders). They are paid on a regular basis, and they are one of the ways investors earn a return from investing in stock, but it is important to know that not all stocks pay dividends. For that reason, it is crucial to specifically choose dividend stocks.

Some of the main types of dividends are:

• Cash dividends (the most common type of dividend): companies generally pay these in cash directly into the shareholder's brokerage account.
• Stock dividends: instead of cash, companies can also pay investors with additional shares of stock.
• Dividend reinvestment programs (DRIPs): investors are able to reinvest any dividends received back into the company's stock, often at a discount.
• Special dividends: these dividends payout on all shares of a company’s common stock, but don’t recur like regular dividends. 
• Preferred dividends:  is a type of stock that functions less like a stock and more like a bond generally fixed in terms of payment.

These stock distributions are generally made as fractions paid per existing share. For example, a company might issue a stock dividend of 5%, which will require it to issue 0.05 shares for every share owned by existing shareholders, so the owner of 100 shares would receive five additional shares. Dividends on stock are not taxable until the owner sells the shares.

What Stocks To Buy Today

Right now you can buy and invest in the next stocks:

• Rolls Royce - plane’s engines 
• Avast - cybersecurity group 
• Wise - currencies convertor 
• Blackberry - cyber security software and technological stocks
• Zoom -videochat software
• Unilever - producer of goods
• Facebook -  social network
• Hochschild mining - gold producer
• JD Sports - sportswear  
• Amazon - distribution of stuffs  
• Boohoo - online fashion
• Pfizer - pharmaceutical laboratory
• Beyond Meat - meat substitute food
• Deere - agricultural machinery  
• Cheniere Energy - liquid natural gas 
• CF Industries - fertilizer company
• Matson - transport services

And some others are:

• DocuSign, Inc - electronic accords
• Coinbase Global, Inc - cryptocurrency trading  
• Twilio Inc - communication and cloud services
• The Walt Disney Company - entertainment and communication means  
• DigitalOcean Holdings, Inc - build, test, and scale any size applications
• NVIDIA Corporation - integrated circuit technology and graphics processing units
• Upstart Holdings, Inc - artificial intelligence for banks loans
• Target Corporation - warehouses
• Unity Software Inc - video game creation software
• UWM Holdings Corp - mortgage lending  
• United States Steel Corp - steel producer
• Sage Therapeutics Inc - a biopharmaceutical company
• Bio-Rad Laboratories Inc - technology products for scientific research and clinical diagnostics

Best Growth Stocks to Buy Now

Some good options are:

• LyondellBasell Industries NV - chemical company
• Nucor Corp - steel producer 
• Steel Dynamics Inc - steel producer 
• Nielsen Holdings PLC - measurement of information, data, and market 
• Westlake Chemical Corp - international manufacturer and supplier of petrochemicals, polymers, and construction products
• Meta Platforms Inc - technology and social networks 
• Unity Software Inc - video game creation software
• BigCommerce Holdings Inc - cloud-based e-commerce
• C3.ai Inc - enterprise-scale artificial intelligence applications
• Texas Instruments Inc - development and marketing of semiconductors and computer technology.
• IonQ Inc - quantum computing hardware and software
• Duolingo Inc - free online language learning
• AvePoint Inc - independent software vendor
• nCino Inc - financial technology
• Avalara Inc - software for automated tax compliance.

Is Worth Investing in Stocks

It all depends on what you buy. While the future of some companies looks positive, the same can’t be said for all businesses. For that reason it is important to do your research into each company you buy, keeping in mind that you need to see the financial results of every company which can give you a picture of the health of the company in the market.

The successful booster vaccination roll-out could lead to an increase in movement, trade, and spending reopening closed industries  (think travel and entertainment) which the takeovers will continue, new industries (technology, e-commerce, and biotech) can reach their potential and low-interest rates will encourage people to spend or invest.

Also bear in mind that some sectors have fared better than others during the current pandemic. Broadly speaking, technology companies have done well while travel firms have suffered. This summons the fears over new strains of the coronavirus, the rising inflation, the continued disruption to supply chains, and global energy crisis, and the continuing impact of Brexit.

It is also important to know that you don’t need to buy shares in a company just because someone said you should. As it was said before you must always do your research first, selecting and monitoring individual shares with the use of a robo-adviser so that an expert can do all the hard work for you.

For all of this, be aware of inflation, invest in the long-term and especially in sectors like e-commerce, renewable energy, online gaming, banks, and leisure.

Step 3: Open Account & Invest with Capital.com in South Africa

Step 1: Open an Account with Capital.com

Go to their official website and click on the “Open an account” button located at the upper right corner of the site. You will need to provide some basic information and then you will be directed to the trading platform upon completing your registration.

Visit the Capital.com website and click the ‘Register’ button. When you do it, you will be asked to enter some personal information (full name, home address, date of birth, and contact details). You will also need to choose a username and a strong password. 

75.26% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Step 2: Verify Your Identity

Once you access the trading interface, you can click on the icon that has your initials, which is located at the upper right corner of the screen. There you will find an option that says “KYC”. Once you click there, you’ll find an area where you can upload a valid ID and proof of residence to verify your identity (the ID confirmation process will typically take 24 hours) then they will activate your account.

You will now be asked to upload a couple of verification documents (copy of your South African passport or driver’s license and a recent copy of a bank account statement or utility bill).

Step 3: Deposit Funds

Now that you have an active account, you can deposit some funds to buy your first shares. Capital.com accepts deposits via debit or credit card (MasterCard/Visa/Maestro), electronic wallets (Astropay, PayO, Neteller, Webmoney) or via wire transfer. If you use the first and second method, your deposit will be cleared instantly with a minimum deposit policy of only €20.  You will then have the freedom to buy shares in over 3,000 companies from several international exchanges.

Step 4: Buy Your First Stock

Once the funds are cleared, you can click on the Trade button – the first one located at the left panel of the trading interface – and you will easily find all the stocks supported by the platform by clicking on the “Stocks” label. Once there, you can filter the stocks by country, sector, and market sentiment by clicking on the different hashtags available.

As soon as your deposit has been processed (which is instant apart from a bank transfer), you can then buy some shares. If you want to browse the many different markets offered by Capital.com, click on the ‘MARKETS’ button followed by ‘SHARES’. Alternatively, if you have a particular company in mind, enter it into the search box and click on the corresponding result.

Either way, you need to ensure that your choice of stock broker is right for your individual needs before signing up. This should look at everything from fees and commissions, tradable shares, supported payment methods, and of course, regulation.

75.26% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Conclusion

The process of buying shares in South Africa has changed considerably over the past decade. You no longer need to speak with a traditional stockbroker over the phone to place your buy and sell orders. As an alternative, all you need to do is pick a regulated online share trading platform. You can deposit some funds using your debit/credit card, and then choose which stocks you wish to purchase. It's worth considering Capital.com, which offers a huge variety of global shares and a low commission trading option.

Capital.com - Overall Best Stock Broker

75.26% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

FAQs

What is a stock?

A stock is a type of investment that represents an ownership share in a company. Investors buy stocks that they think will go up in value over time.

Can I invest in stocks outside South Africa?

Investing offshore gives you a far greater chance of a balanced, diversified portfolio with access to better interest rates, stronger economies and different industries, and also a diversification of the portfolio's risk as well as an exposure to the growth of other economies.

How can I earn dividends from a stock?

You can be paid on a regular basis in return from investing in a stock. Companies usually pay dividends quarterly, though some pay monthly or semiannually. A dividend is paid per share of stock — if you own 30 shares in a company and that company pays $2 in annual cash dividends, you will receive $60 per year.

What are the best stocks to buy nowadays?

Right now the best stocks to buy are located in sectors like ecommerce, renewable energy, online gaming, banks, leisure, utilities (Vistra Corp), real estate, materials, technology, industrials, health care, financials, energy, consumer staples (beverage), consumer discretionary (amazon) and communication services.

Should I buy JSE-listed stocks?

That’s correct, especially because a further benefit of investing on the JSE is that it provides a highly-regulated trading environment, and therefore offers a higher degree of transparency and protection from fraud. The JSE also provides a vehicle for pension funds and other retirement savings funds to grow their investment. However, what’s crucial to understand is that unlike depositing your savings into a bank account where your capital is guaranteed, when you buy shares through the JSE (or any other stock exchange), you not only stand to gain, you also run the risk of losing some – or all – of your capital if the market or the company you have invested in takes a bad turn. For that reason, it’s important to understand your tolerance for risk and make informed decisions when choosing your investments. A good financial advisor can help you navigate these hurdles and assist you in building a risk-balanced portfolio.

How do I buy stocks in Capital.com?

Yes you can but at first, you have to create an account with a normal registration process, then you need to verify your ID, deposit funds and buy stocks always keeping in mind that these kinds of brokers or trading platforms have some fees and that in every investment there is a risk that you must consider before putting some money.