How to buy Hong Kong shares - invest in the Hong Kong stock exchange
Hong Kong is also seen by many people as the gateway to China. Many Chinese stocks are not accessible to foreign investors. However, the shares listed on the Hong Kong stock exchange are freely tradeable. But what is the best broker to invest in Hong Kong shares?
Where can you trade Hong Kong shares?
Would you like to actively trade in stocks listed in Hong Kong? This option is attractive when you want to constantly respond to the latest market conditions. By using Plus500’s CFD’s you can place orders at rising and falling prices. With the button below you can try out the options with a demo without any risk:
Where can you buy Hong Kong stocks?
Of course, you can also choose to buy the stocks listed on the Hong Kong stock exchange. Other investors choose to buy an index fund with which they can follow the price of an index one on one. The prices brokers charge for buying and selling shares from Hong Kong fluctuate a lot. Not every party is equally cheap. A good option is eToro, as you do not pay set commissions at this broker. With the button below you can directly open an account with eToro:
Pay attention to the exchange rate
It is important to keep a close eye on the exchange rate of the Hong Kong dollar. When you invest in stocks listed on the Hong Kong stock exchange, you also indirectly invest in the Hong Kong dollar. When the price of a share rises, you will receive the profit distributed in Hong Kong dollar. When your own currency value decreases against the Hong Kong dollar, you can still achieve a negative result.
What are the benefits of investing in Hong Kong?
Since Hong Kong was converted to a special administrative region of China in 1997, the country attracts a lot of investments. The country's financial sector is well developed and attracts a lot of money.
Hong Kong is in the middle of growth in Asia and you can also invest in various Chinese companies through Hong Kong.
What are the disadvantages of investing in Hong Kong?
The Hong Kong stock market is strongly linked to the international market. When an economic crisis breaks out, there is a good chance that the stocks listed in Hong Kong will also go under.
There are also the necessary geopolitical risks associated with an investment in Hong Kong. Social problems and China's growing influence over Hong Kong can put a brake on foreign investments. Because Hong Kong is heavily dependent on the financial sector, the economy is also very vulnerable to negative economic developments.
How to get better results in Hong Kong?
If you are going to invest at the stock exchange in Hong Kong, then it is advisable to investigate the companies well. In the short term, you see a lot of volatility on the stock market: however, these kinds of strong movements say little about the real value of a company. Investigate the companies in which you want to invest and analyse out how China is doing on the world stage.
What is the Hong Kong stock exchange?
Hong Kong's modern stock exchange opened on October 6, 1986 and started with 249 companies worth 245 billion Hong Kong dollars.
What is interesting about this stock exchange is that the opening price of shares is determined by holding a session before the opening of the exchange. It is not until 9.20 in the morning that it is determined at which price the shares will be traded.
Also noteworthy is the one hour lunch break that actually shuts down the trading session. Between noon and one o’clock in the afternoon the stock exchange closes.
The stocks listed on the stock exchange are traded in lots. For example, a lot can consist of 100 or 1000 stocks. It is therefore not possible to buy 50 shares on the exchange. However, there are special markets on which you can trade smaller amounts of Hong Kong shares.
A last interesting rule is that limit orders should be placed close to the current stock price: they should not be more than 24 ticks away from the stock price.
Hong Kong Stock Index: Hang Seng Index or HSI
You can also invest in the Hang Seng Index or HSI. This index follows the largest companies listed on the Hong Kong stock exchange. By buying an ETF on this index, you can invest in a diversified basket of shares listed on the Hong Kong stock exchange.
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