- Coronavirus accelerated the interest people have in trading exponentially. In a world under lockdown, people looked for another income online.
- When financial literacy rates are poor, people trust in the returns they will get from their pension schemes.
A couple of decades ago, playing the financial markets was a preserve of the privileged few as access and knowledge was restricted.
Today, however, most people will either be actively trading on their smartphone or talking about things such as gold price, are US Stocks too high? and is Bitcoin worth investing in?
Coronavirus accelerated the interest people have in trading exponentially. In a world under lockdown, people looked for another income online.
Social media channels exploded with practically everyone discussing their next investment. It, hence, makes sense to reflect on what will be some themes coming through this year for Kenyan investors and traders.
Trading will become ubiquitous. For more Kenyans than ever before, investing and trading will become something you just do. Like topping up phone credit or buying groceries, Kenyans will begin to allocate a larger percentage of their income to investing for their future.
As much as someone may take any spare time to browse through their favourite sport’s teams, latest result or read about the developments in local politics, 2022 will see even more people dedicate time to improve their financial literacy.
When financial literacy rates are poor, people trust in the returns they will get from their pension schemes. In most cases, allocated funds to these schemes have absolutely no idea what return to expect.
Indeed, a recent survey held within the Retirement Confidence Report found that 70 per cent of workers who took part in the study and are currently contributing to pension schemes did not know their actual pension entitlement or their total accrued returns at retirement.
This is a problem all over the world. The same survey says that, tragically, 86 per cent of Kenya’s working class are staring at poverty in retirement. My hope is that 2022 is the year when more people than ever take control of their financial futures.
The term Fourth Industrial Revolution was coined by the World Economic Forum Founder Klaus Schwab. It defines as a social, political, and economic shift to an era of embedded connectivity distinguished by the omni-use of technology throughout society such as metaverse.
Metaverse will come with huge benefits and issues and will touch almost all aspects of life through artificial intelligence, advanced robotics or virtual reality.
It’s natural that this will impact the world of investing and we are already seeing how it’s taking hold through people allocating their hard-earned savings to investing in Non-Fungible Tokens or ‘NFTs’ , blockchain projects and Crypto.
This will be a year where more innovators think of currently unknown digital assets and other initiatives that will catch the imagination of Kenyan investors. A warning here though.
Very often these new projects come with people intent on scamming or promise of huge financial benefits. Be careful investing in things you (and 99.9 per cent of people) don’t understand yet.
Up to five years ago, many Kenyans were trading local equities and bonds only. Once Equiti Group opened the first regulated brokerage in Kenya (EGM Securities/ FXPesa) in 2018, we gave access to Foreign Exchange (FX), US and European Stocks, Commodities and more.
From that time, Kenyans picked up gold trading and some major FX pairs, such as EURUSD and GBPUSD. These were always the most traded products. My prediction for 2022 is that other products will start being a priority for Kenyans- particularly Indices and US Stocks like Tesla (TSLA).
This year, there will be more females both working in finance and personally investing than ever before. We have a 50/50 split of females versus males across our five offices in Kenya. We think it is important to have this representation and believe it is one of the main reasons why we stay ahead of the competition.
At Equiti Group, our data department has determined that Kenyan female traders are currently seeing higher profits than males on average (particularly in the 25–35-year-old demographic). Female traders are often exceptionally good dealers, we just need to see more of them trying it.
So this year will be one in which we will see more people take ownership of their financial futures, they will learn more and begin to trade products they haven’t previously.
The writer is the chief executive officer Equiti Brokerage. @Brian_equiti