24 May 2021
The Hong Kong Stock Exchange is now the fifth largest in the world when judged by market capitalisation. It’s an increasingly important part of the Asia-Pacific region’s financial architecture, yet despite this, investors from other parts of the world still sometimes view it with caution.
Global trade execution using the Hong Kong stock exchange is, in fact, no more complicated than trading elsewhere, mainly when you use a broker on the ground in the territory with a deep understanding of the region’s markets.
There are several ways in which you can trade on the Hong Kong stock exchange. These include:
The simplest way for overseas investors to gain exposure to HK securities is by investing in exchange-traded funds (ETFs). These are simple to trade, remove the currency risk and provide instant diversification, making them suitable for many investors.
Some of the most popular investments in this category are significant global name funds, including iShares MSCI Hong Kong ETF and First Trust Hong Kong AlphaDEX Fund.
If you’re looking for more direct global trade execution on the Hong Kong stock exchange, there are many ways to achieve this.
Any investor interested in participating in the Hong Kong stock exchange can do so by opening a brokerage account with a broker in their own country that offers global trade execution services.
Most who offer international services will provide access to the Hong Kong exchange, but ensure your research thoroughly before proceeding. You will want to pay attention to the account type offered and how the commission is structured and applied, as well as the territories in which they trade.
If you’re serious about trading on the Hong Kong stock exchange, an arms-length execution-only broker operating outside the territory may not be the most appropriate.
There are several advantages to using a Hong Kong-based broker that offers global trade execution services if you want to trade effectively on the Hong Kong stock exchange. Being based in the territory, they understand how financial markets in the sector operate. They will have built up considerable expertise and experience, which their clients will be able to access. This gives them a key advantage over arms-length overseas brokers.
Trading on the Hong Kong stock exchange won’t be for everyone, but with accessible global trade execution services readily available in the territory, it’s not a particularly difficult process.
As with any other trading activity, you need to conduct thorough research and ensure you work with a skilled, knowledgeable and focused trading partner.
At GIS HK, we offer a dedicated operations system and trading desk, open across Asia-Pacific, UK, European and US trading hours.
Our low latency, best execution services are unrivalled across the region, and we’re continually working to refine our service. We believe we give our clients the best chance of trading success. Our multi-asset 24-5 global trade execution, global clearing, safe custody, and prime solutions make the trading process straightforward.
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