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Alternative investments in emerging economies

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There’s a continued increase in alternative investment asset classes throughout the ASEAN nations – a breakaway from traditional established financial assets. This was made clear by the rise of micro investments in cryptocurrency. Whilst interest in cryptocurrency continues to dwindle, it still highlights that there is a huge demand for alternative investment options with low capital entry barriers in the region.

“When compared to developed economies, emerging economies often have a large accessibility barrier to regulated and structured investment products for low to medium income earners,” said Mathew Tate, managing partner of Charterprime, an Australian multi-asset brokerage firm.

(Mathew Tate, Managing Partner, Charterprime)

Accessibility to international markets are often limited by a higher capital entry barrier, where alternative investment options like foreign exchange or micro investing products can open accessibility for people. These often come with a higher risk reward scenario which becomes more relevant in emerging economies with larger wealth gaps.

“Foreign exchange is a good example of alternative investments gaining popularity in ASEAN countries. It often has a low capital entry barrier while knowledge and services in the industry are abundant. The industry has a wide variety of educational resources readily available – from private training schools to free online education – almost anyone can invest the time in learning the fundamentals of foreign exchange trading,” said Mr. Tate.

The education, the ability to ‘paper trade’ for practice, and the low capital entry to access exposure to international markets makes foreign exchange trading a great alternative investment for developing nations, he added.




(Managing Partners of Charterprime Mathew Tate and Simon Stephen)

The growth in popularity of foreign exchange in ASEAN regions is bringing interest from governments to regulate the products and services in the industry. The right balance can be achieved with industry and regulatory consultation – the Philippines’ Securities and Exchange Commission (SEC) can look to developed foreign exchange trading regulations by seeking guidance from both established foreign brokerage firms and foreign regulators that have existing frameworks in place.

Mr. Tate believes the foreign exchange educational community in the Philippines has done a great job at educating new traders on the importance of regulation and key points when selecting a broker. Should the Philippines’ SEC choose to implement regulation, they will be presented with a huge opportunity to increase revenues from a new financial sector, servicing both domestic and international clients. At the same time, the government will be able to fulfill the essential role of offering extra protection to their citizens looking to participate in foreign exchange.

Meanwhile, Mr. Tate suggests for everyone to analyze the following four key elements when deciding on a broker to trade with:

  1. Regulatory status: Does the firm have the appropriate license from a reputable regulator to conduct foreign exchange brokerage services?
  2. Safety of funds: Does the broker segregate client margin funds from the firm’s operational account?
  3. Support: Does the broker provide 24-hour client support?
  4. Trading and execution: Does the broker provide a fair market price and perform trading execution well?

“Finding a good balance of consumer protection and flexibility is always a challenge regulators face. They want to promote growth and market integrity whilst ensuring the end user has adequate levels of protection. As it stands in the Philippines, many consumers have been duped by unregulated brokerage services – many scammers have attempted to take advantage of the unregulated state of foreign exchange in the Philippines and the people who don’t have an understanding or education in foreign exchange or alternative investments – and this is what we, as fellow traders, strive to change,” said Mr. Tate.

(During the Airbus A320 customized livery launch with Airasia)

About Charterprime

Charterprime is an award-winning multi-asset derivatives brokerage offering trading platforms to both institutional and retail investors. Built from a pool of professionals with real industry experience, our team comprises of a multitude of industry experts from all over the globe with a diverse range of specialties; and together our global team collaborates in tight synchronicity to make Charterprime a world-leading broker. For more information, visit www.charterprime.com.

Charterprime Seminar in Philippines

Charterprime will be participating in Philippines Traders Fair 2019 on May 25 2019, with an exclusive seminar for traders to gain latest market insights and trading techniques with esteemed experts and like-minded traders. Find out more at here.