Trading has seen a rise on the African continent as more people have access to the market through Forex exchange brokers. People are market-literate, and countries are beginning to regulate the markets. With an estimated 1.3 million forex traders in Africa, with the majority in Nigeria and South Africa, trading is increasing in popularity.
More and more people have access to trading markets thanks to smartphones and online trading which makes more people desire knowledge about the market.
There are three types of markets that come into play: bull market, bear market and lateral. Symbolized by the upward horns of a bull, the bull market represents an optimistic market where investors sell, and prices rise. A bear market describes a market where prices begin to decline. it’s a situation where investors are less likely to sell, and prices will fall. The lateral trend describes when the market cannot decide between the two previous, and therefore, investors are unable to achieve significant returns.
In 2023, global trade is slowing down. Inflation and interest rates are on the rise and businesses and investors are concerned about a global recession. Still, some businesses are entering international markets, proving that investors aren’t entirely intimidated. This may also be because inflation has declined in some countries.
As mentioned earlier, the bear market, which describes a drop in investment, will continue. The financial downturn from the pandemic and inflation have lingered on in the market . However, investors have made it out of the first quarter of 2023 since there was a solid stock-market selloff during that time.
Investors are still worried about the recession and the final stages of the bear market, which was the case in 2022. However, some experts believe that we have entered a new bull market. Others are not as confident and believe this is a bear market rally. Whether this is true and there is the possibility of a recession is still unknown.
African traders who wish to go for new ventures may opt for alternative markets. After the economic uncertainties described earlier, investors decided to put their money into cryptocurrencies and real estate. This includes the so-called meme coins, famous because of their pop-culture significance. Dogecoin and Shiba Inu are among the profitable currencies, and these are contributing to volatile trading in that space.
The war in Ukraine was followed by high inflation in Europe, making the Euro decline in value. Like other central banks, the European Central Bank (ECB) has decided to increase interest rates several times to hold back inflation and foster growth in the European economy. This has ultimately made the Euro rise again.
Inflation has also affected people in Asia, as the inflation in Japan was the highest in 40 years. The value of the Japanese Yen went very low – as low as it had been in 32 years. The Japanese economy seems to be back on its feet, as it grew at a 6% rate in the second quarter of 2023. These trends show that the slowdown in the markets is not happening in Africa alone, but can be considered a global occurrence.