Chaka Investment Review: Legit or Scam Stock Trading App?

Have you heard about Chaka and their investment platform?

Does the prospect of using Chaka to invest in local and foreign stocks interest you?

If yes, then you are definitely not alone.

Even though there are several platforms for investing in stocks from Nigeria, no other platform does better in putting together both local and foreign stocks for Nigerian investors.

So, in this article, we’ll be looking at Chaka’s investment proposition as a stock trading platform and if it is worth putting our money.

Let’s dive in.

What Is Chaka All About?

Chaka is an investment platform that helps investors buy stocks and ETFs from Nigerian and U.S stock exchanges.

The company behind Chaka is registered with the Corporate Affairs Commission (CAC) as Chaka Technologies Limited.

According to Chaka, through their platform, investors can have instant access to over 4,000 stocks & ETFs on the Nigerian Stock Exchange, New York Stock Exchange, and NASDAQ.

Chaka works in partnership with licensed stock broking firms in Nigeria and the U.S to facilitate stock investments via its platform.

Chaka however claims that all investments on its platform, both local and international, are facilitated by Citi Investment Capital Limited, a stock brokerage licensed with the Nigerian Stock Exchange and the SEC.

How Does Chaka Make Money?

Chaka probably makes money via broker commissions on its platform.

If that is so, then Citi Investment Capital Limited is probably the investment arm of Chaka or the parent company used to facilitate all its brokerage activities.

Chaka charges investors a brokerage commission between 0.5% to 1.5% for both local and international investments.

The charges are prorated, and Chaka claims that the more you trade, the lower the fees you’ll incur.

Brokerage Fees

Apart from commission fees, there are other brokerage fees that are attached to buying and selling stock assets on Chaka.

SEC Fees

Chaka charges investors an SEC charge fee of 0.3% on every stock purchased.

NSE Fee

Chaka charges investors an NSE charge fee of 0.3% on every stock sold.

CSCS Fee

Chaka charges investors a CSCS charge fee of 0.378% on every stock sold, and a 0.063% trade alert fee on every stock purchased. Both charges are VAT Inclusive.

Stamp Duties

Chaka imposes a stamp duty charge of 0.075% on every share bought or sold on the Nigerian stock exchange.

How to Invest With Chaka

If you’ve decided to invest with Chaka, you can start investing via their website or app.

Once you’ve signed up with Chaka and completed your KYC documentation, you’ll be assigned a CSCS number, which is your brokerage account number synced with the Clearing and Settlement House of the Nigerian Capital Market.

After that, you can start buying stocks and ETFs of companies in over 40 countries.

The minimum deposit to start investing in local stocks is 1,000 Naira, while $10 would be required for international trades.

How Much ROI Can You Make With Chaka?

Chaka doesn’t control the amount of returns that you get by investing through their platform.

Chaka operates like a digital stock broker, which facilitates investment in stocks and ETFs globally.

How much ROI you get from investing through Chaka would depend on the performance of the stocks you choose to buy.

For context, it has been ascertained that the average ROI from the U.S stock market is 10% per year.

So, your return on investment could fall below that or rally beyond, depending on your choice of stocks.

Is Chaka Legit or Scam?

By all indications, Chaka seems like a legit platform for buying stocks of local and international companies.

The company claims to be fully licensed with the Securities Exchange Commission (SEC) through a first of a kind Fintech License. This means that Chaka’s operations are regulated by the SEC within the tenets of the Nigerian Stock Exchange and the Central Securities Clearing System.

In the same line, all dollar assets marketed by Chaka are regulated by the U.S FINRA and the U.S SEC, with all dollar deposits SIPC-insured up to $500,000.

This shows that Chaka has done the basic regulatory compliance needed for a fintech company of its nature, and therefore should enjoy a certain level of trust.

Can You Lose Money With Chaka?

Since Chaka is just a platform that facilitates investment in stocks, the risk lies in investors’ choice of stocks.

The nature of stock market investing means that investors can lose money when stock assets depreciate.

So, definitely, you can lose money while investing with Chaka if the stocks you buy perform poorly.

Should You Invest With Chaka?

Chaka is a good place to start if you love the idea of stock market investing. They seem to have a very transparent operation, which gives a lot of clarity to investors.

My only grouse is with the many charges imposed for trading NSE stock assets. Doing anything in Nigeria is just so difficult these days, eh?

I guess if I was to start investing with Chaka, I would totally avoid Nigerian stocks due to the many brokerage charges involved, and more so for their notoriety for performing poorly.

All in all, Chaka gives access to over 4,000 stocks and ETFs globally, and could be the window for many Nigerians to start investing in global high-performing companies.

If you choose to invest, it is advised that you do so with only money you can afford to lose.

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