Despite the worldwide health crisis and economic gloom engendered by the Covid-19 virus, the pandemic may yet have a silver lining for some Kiwi investors.
An increasing number are eyeing stocks in US companies - several of which are working to develop a Covid-19 vaccine - through a new commission-free digital brokerage launched in New Zealand last month by Stake.
More than 2000 New Zealanders were on Stake's wait-list even before its launch and company CEO and founder Matt Leibowitz believes people have become more interested in sharemarket and stock trading since the outbreak of the coronavirus.
He says Kiwis are highly engaged with trading opportunities in the US share market which include chances of buying into companies at the leading edge of the global race to develop a coronavirus vaccine.
"There are a number of companies listed in the US working on vaccines," he says. "This creates a massive opportunity for investors because, as we know, so many people around the world will need a vaccine.
"Obviously there is a lot of interest around vaccines because people are reading about it all the time but there are many other opportunities as well. The US has the world's largest stock market, there is so much diversity - it really is a Disneyland for investors."
Leibowitz says Stake is focusing solely on the US and is adapting technology to enable Kiwi investors commission-free access to the market there using app and web-based platforms while in the comfort of their homes.
"Commission-free trading has been around for over five years," he says. "We launched in Australia in 2017 but until now New Zealand has been left out. New Zealand is an important place and one has to ask why has it been left waiting for so long, as commission-free is the way the world is going."
He says for the last few months the Australia-New Zealand operation has traded an average of 10 million shares a month - or more than US$1 billion - and built a customer base of over 90,000 around the world.
Kiwis have been very quick to cotton on to the opportunity: "We launched in the UK a few months ago but the first day we opened in New Zealand (May 1) we already had more accounts here than in the whole of the UK."
Leibowitz, who founded Stake after nine years at Chicago-based trading firm Optiver, believes its system could have been built for a time like the Covid-19 pandemic.
"People are looking to understand what is happening with the markets and wanting to identify what opportunities are out there," he says. "No matter the situation, if you are an optimist you can find opportunity - and we are giving access to this through a platform that is intuitive in its experience but sophisticated in its offering.
"The leading stocks today are not the 'old guard' but are to be found in the tech industry - companies like Amazon, Google, Facebook and Netflix - while pharmaceutical and biotech companies working on treatments and vaccines for Covid-19 are also providing big opportunities."
Liebowitz says these include California-based Gilead Sciences and Invio Pharmaceuticals, a company headquartered in Pennsylvania which is backed by the Bill and Melinda Gates Foundation for its research into a vaccine called INO-4800, now going through the first phase of clinical testing.
He says companies benefitting from the pandemic also offer opportunity to investors, including Zoom and Peloton, an exercise equipment company based in New York.
Liebowitz believes there is a "great need" in New Zealand to access the type of investing offered by Stake: "There are plenty of great companies in New Zealand but there are opportunities elsewhere as well – and Kiwi investors should be asking 'why limit myself to my own market'?"
He says three-quarters of Kiwis investing through the Stake platform have bought shares before and around 55 per cent use both the app and the web-based systems.
Although the company does not charge customers commission-based fees, it does set a flat fee of one per cent (a $2 minimum) when investors move money in or out of their Stake account from New Zealand dollars to US dollars or vice-versa. However, as funds are held in US dollars, this is only charged on deposits and withdrawals, not per trade. All Kiwis can also receive a free share in Nike, Go Pro or Dropbox when they join Stake.
For more information go to: hellostake.com