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How to Buy Stocks on JSE in South Africa

Vincent Nyoike
Vincent Nyoike Investment

Investing in the stock market is an excellent way to grow your wealth in South Africa. To make it in trading online, you need to build a solid portfolio and understand the market. There are many stocks listed on the Johannesburg Stock Exchange that you can invest in. Although investing in the stock market can earn you high returns, it also carries some risk. As an online trader, you need to minimize risks as much as possible. In this article, I will guide you through on how to buy shares in South Africa.

1. Select a Stock Broker

Before you can start investing in stocks in the Johannesburg Stock Exchange, you need to find a broker. A broker will help you to open a trading account. He will also ensure the security of your account and that it is in compliance with the set regulations. A stockbroker will also help you in researching the market and identifying shares that will give you returns. 

Related: How to make money online in South Africa. 

How to Select a Stock Broker to Invest in Shares in South Africa

You need to be keen when selecting a stockbroker. You need to look for a regulated stockbroker in the market since there are many unregulated stockbrokers in the market. Some of the considerations to make when looking for a stockbroker in Kenya include;

  • He should be licensed and regulated
  • Trading platforms available and demo account
  • Trading commission and fees
  • Should have a reliable customer support

Best Stock Brokers in South Africa

The following are some of the best stockbrokers in South Africa you can use to buy shares.

  • FXVC. The stock broker charges low fees and has a wide range of shares to trade. You can trade via web or mobile app. It also comes with low spreads and excellent research and trading tools.
  • Libertex. You can trade on Libertex using MT4 or MT5. It is regulated by FSCA and has zero spreads and low commissions. It does not charge deposit fees while withdrawing using PayPal and Skrill is also free. There is an inactivity of 10 EUR per month after 180 days.
  • Plus500. The stockbroker does not charge deposit fees or commissions. There is an inactivity fee of $10 per quarter after 3 months of inactivity. There are many financial instruments to trade.
  • Ava Trade. The stockbroker charges a commission of 0.13% for US stock. There is no withdrawal fee and no deposit fees. You can trade in US, UK and European stocks. It has a leverage of up to 10:1. There is also negative balance protection.
  • Interactive Brokers. The stockbroker is highly regulated and charges low-cost trading fees. There is an inactivity fee of $20 per month if you have less than a $2,000 account balance. There is no deposit fee and pays a commission of $0.005 per share.
  • Capital.com. The stockbroker offers a wide range of shares in the US, UK and Europe. They do not charge commission and there are no withdrawal or inactivity fees. It is regulated by the FCA and CySEC.

2. Open a Trading Account

The first thing you need to do before buying shares in South Africa is to open a trading account. To open a trading account, you need to sign up using your email address and then enter your personal details like date of birth. Your stockbroker can help you to open a trading account. 

3. Upload ID

You need to upload your ID and other verification documents. You also need to upload other documents like a utility bill or a bank statement. All this is done to ensure adherence to set regulations and avoid money laundering.

4. Deposit Funds

After opening an account and it has been verified, the other thing you need to do is to deposit funds. You can fund your trading account using a bank transfer, credit card, debit card, or electronic wallets.

5. Select the Best Shares to Buy

Once you have funded your trading account, the other thing is to buy shares in the Johannesburg Stock Exchange. There are many companies in and out of South Africa that are listed in JSE. Before you can buy shares, you need to research the market well to buy shares that will give you returns. Your stockbroker can help you in researching the market and selecting stocks that can earn you returns in the future.

Related: Best investment opportunities in South Africa. 

How to Make Money Investing in Shares in South Africa

People earn profits when they invest in stocks. There are two ways you can earn a profit by investing in shares in South Africa:

1. Capital Gains

You can earn a profit by investing in shares when you sell them at a higher price than you bought them. Every investor who buys shares expects that their prices will appreciate in the future. Once you have earned capital gains through investing in shares, you are required to pay capital gain tax.

2. Dividends

The other way you can earn a profit by investing in the JSE is through dividends. Most companies pay dividends to their shareholders when they make a profit. Dividends are paid to shareholders based on percentage of shares one owns in the company. Companies then distribute dividends to brokerage accounts where stocks are listed.

Summary on How to  Buy Stocks in South Africa

You can earn returns by investing in stocks in South Africa through capital gain and dividends. To start trading in JSE, you need to select a stockbroker who will help you open a trading account and also select shares that can earn returns in the future. Consider the fees that brokers charge as transaction fees, deposit and withdrawal fees.