How to Buy Stocks in Hong Kong 2023

Summary

Investing can be a thrilling adventure, full of potential gains and losses. It’s like exploring a vast and uncharted wilderness, where every decision you make can lead you to new opportunities or unexpected challenges.

Assessing which sectors are performing well at any given time is a wise approach when learning how to buy stocks from Hong Kong. Investors can make informed decisions by assessing which sectors are performing well in the current economic climate. For example, due to rising oil and gas prices, companies in this sector are performing well. It’s also important to look for stocks with robust balance sheets and a proven track record during bearish periods. Growth stocks can also be an option for investors looking to speculate on a company’s potential for future success.

When choosing which stocks to buy in Hong Kong, it’s essential to prioritise high-quality companies with a history of weathering bearish markets and having a strong balance sheet. One way to identify such stocks is to look for companies that have consistently increased their dividend payments for over 50 years, even during recession-based cycles. Furthermore, it’s important to do thorough research before considering what penny stocks to buy in Hong Kong as they are associated with high risk, often being junk companies or scams.

Discover everything you need to know about opening a stock broker account in Hong Kong, including fees, commissions, and trading platforms, with our comprehensive guide.

Whether you choose to invest in real shares or CFDs, the key is to stay focused, keep learning, and be prepared for anything. So why not take the dip and venture on your own investment journey.

How to Buy Stocks from Hong Kong in a few Steps?

The table above lists the available brokers, and readers can choose from them based on their preferences and requirements. Those wondering how to buy stocks for beginners can follow the steps below to start buying shares.

1. Open a Share Dealing Account
2. Deposit Funds
3. Research and Pick your Stocks
4. Select the Order Type
5. Activate the Order and Buy your Stocks

What Markets can you Buy Stocks from in Hong Kong?

When learning how to buy stocks in Hong Kong, investors should first consider the exchange and market they want to gain exposure to. Hong Kong natives can invest in companies listed on the Hong Kong Stock Exchange, one of the world’s leading financial centres. However, many investors also look to buy international shares in Hong Kong to diversify their investments and take advantage of opportunities in other markets. As investors aim to construct robust portfolios and achieve maximum potential success while minimising risk, they often explore international investment opportunities. Besides, considering HK stocks to buy, investors can purchase shares in foreign stock exchanges, such as those in the US, UK, and France, across various markets such as technology, real estate, healthcare, finance, and communication services. This can prove to be an effective means of diversifying portfolios, allowing investors to spread risk across different sectors and regions. Experts recommend dedicating around 20 percent to 40 percent of an investment portfolio to international stocks.

Simply put, investing in various market types and exchanges can reduce overall risk, making it easier to navigate market fluctuations and generate returns over time.

What are the Normal Fees of Buying Stocks from Hong Kong?

When going to buy shares online, investors must consider the fees charged by a broker, along with the quality of shares offered. Selecting an expensive broker without proper research could lead to the eroding of potential profits. Apart from the cost of shares, additional fees such as transaction fees, account maintenance fees, withdrawal fees, foreign exchange fees, and inactivity fees may also be charged. Some brokers may even charge a handling cost for shares.

Accordingly, choose a broker with appropriate trading instruments and fees that do not adversely impact profits. For beginners interested in stock trading, Evest and ThinkMarkets are recommended, as they offer a pricing structure that aligns with industry standards. When learning how to buy shares in Hong Kong, investors should carefully analyse the fee structures of brokers operating in that market to avoid unexpected costs.

Pros and Cons of Buying Stocks from Hong Kong

Investing in shares can be an exciting and potentially profitable endeavour. Still, it’s essential to understand that it comes with pros and cons. Let’s explore the pros and cons of buying shares to help you determine whether investing in shares aligns with your investment goals and risk tolerance.

How to Choose the Broker I need to Buy Stocks from Hong Kong?

Brokers act as middlemen between traders and stock exchanges, facilitating the buying and selling of securities. The decision to choose a broker for buying stocks from Hong Kong is crucial and can be challenging due to the plethora of options available. Nevertheless, by taking into account following factors you can simplify the process.

Regulation

When considering how to buy shares from Hong Kong via online brokers, one key metric to consider is regulations. Having a regulatory body overseeing a stock broker adds legitimacy and ensures that your funds are managed responsibly. When a stockbroker is regulated, it is held to a set of standards established by the regulatory body. The Securities and Futures Commission (SFC) oversees and enforces securities and futures market legislation in Hong Kong.

As the primary exchange operator in Hong Kong, the Hong Kong Stock Exchange (HKEX) is subject to various regulations enforced by the Securities and Futures Commission (SFC). The SFC sets the standards for market integrity and transparency and oversees HKEX’s operations to ensure compliance.

HKEX is required to follow SFC’s regulations regarding the listing of securities, including reporting obligations, timely disclosure of material information, and corporate governance standards. HKEX must also adhere to the SFC’s rules on membership eligibility, market access, and financial resources.

HKEX also serves as the front-line regulator of listed issuers, including listed companies. HKEX administers listing, trading, and clearing rules and provides various services at the wholesale level to customers of the exchanges and clearing houses. The range of services provided includes clearing and settlement, depository and nominee services, trading, and information services. The intermediaries that service investors directly, such as investment banks or sponsors, securities and derivatives brokers, custodian banks, and information vendors, also fall under HKEX’s regulatory purview.

Markets

When considering how to buy shares from Hong Kong, another factor to consider is the wide range of markets you can access to. Hong Kong natives can access a range of markets to trade shares, including healthcare, utilities, IT, communication services, consumer staples, real estate, and industrial sectors. To do this, they can leverage the power of global exchanges and trading platforms to take advantage of opportunities worldwide. By tapping into these markets, investors can diversify their portfolios and gain exposure to a range of industries. For example, those interested in investing in healthcare can access stocks and stock CFDs of leading healthcare giants. In contrast, those who prefer technology can invest in stock CFDs of tech giants like Amazon and Apple. Whatever your preference, online brokers like Evest and ThinkMarkets allow Hong Kong natives to access global markets and exchanges, making them take positions in their favourite stocks to diversify their portfolios.

Platform

Looking to invest in Hong Kong’s bustling stock market? The first step is to uncover a suitable trading platform to pick some HK stocks to buy. To ensure success, look for a platform that offers a user-friendly interface, real-time data, and a wide selection of stocks. You’ll also want to consider security features, low fees and commissions, research tools, and mobile trading capabilities. And don’t forget about customer support! And don’t drown in a sea of online broker platforms in Hong Kong! First, determine your investment goals and needs, then set your sights on the appropriate desktop or mobile platform that will keep you afloat towards success. With the right platform, you’ll have access to the tools and information you need to make informed trading decisions and take advantage of all that Hong Kong’s stock market has to offer.

Offering

When learning how to buy shares in Hong Kong, investors need to consider the various offerings by stock brokers; real shares and stock CFDs. When you buy real shares, you are purchasing a stake in a company, which means you have ownership rights and can benefit from dividends and capital gains if the company’s stock price rises. However, this also means that you bear the risk of potential losses if the stock price decreases.

On the other hand, when trading CFDs, you are entering into a contract with a broker to speculate on the underlying asset’s price movements without actually owning it. This means you can profit from both rising and falling prices, but it also exposes you to higher risks due to leverage, which can amplify your losses and gains. Clients have the option to choose between share CFDs or real stocks. Before choosing what shares to buy, note that online brokers like Evest and ThinkMarkets offer a range of investment options to meet your demands, including share CFDs trading in the global stock market.

Trading Commission

The commission charged by online brokers for trading stocks can either be a fixed fee per transaction or a percentage of the trade’s value. The amount of commission charged can vary depending on several factors, such as the broker, the type of investment product being traded, and the trade size. Some online stock brokers offer zero percent commission to buy shares, but this may come with hidden fees or limitations. When looking to buy stocks, it is vital for investors to thoroughly examine the broker’s fee schedule and terms of service to fully comprehend any trading commissions and extra expenses that may be involved. It is worth noting that certain online brokers, such as ThinkMarkets and Evest, charge minimal commission on trading but without any non-trading charges for those looking to buy shares.

What are the Popular Trading Platforms used to Buy Stocks from Hong Kong?

Brokers provide online platforms, both custom-built and third-party, to buy shares online. These platforms are available on desktop and mobile apps. Moreover, these platforms offer traders numerous advantages, such as access to global markets, real-time data and analysis, various trading tools and features, and flexibility.

Proprietary Trading Platforms and Apps

When trying to determine what stocks to buy, it is sensible to analyse the proprietary trading platforms and apps offered by brokers. We’d like to mention that the trading platform offered by ThinkMarkets, called ThinkTrader, is available on desktop and mobile devices and has been designed to simplify trading for traders of different levels of experience. The desktop app of ThinkMarkets is a comprehensive trading platform that offers a range of features to traders.

One of its features is the ability to customise charts with indicators, grids, and period separators. Once you have customised your chart, you can save it as a template and even set it as your default chart by right-clicking on it. Furthermore, the Economic calendar feature of the app enables traders to keep track of upcoming news events and make informed decisions accordingly.

On top of that, ThinkMarkets mobile app has everything to keep up with your fast-paced lifestyle and can take your trading game to the next level. The app provides real-time quotes and charts for various asset classes, including stocks, indices, forex, and commodities. Furthermore, the ThinkTrader mobile app allows traders to create a personalised watchlist of their favourite stocks and other assets.

MT5 Platform & App

MT5 is an all-in-one third-party platform offered by different brokers that support trading in financial instruments such as forex, stocks, futures, and cryptocurrencies. The platform presents refined charting and analysis tools, and algorithmic trading capabilities, making it a popular choice among traders to buy shares online. The MT5 desktop app provides traders with a comprehensive range of charting tools and indicators, including more than 80 built-in indicators and drawing tools.

With features like real-time market data, advanced charting and analysis tools, and the ability to execute trades on the go, buying shares using the MT5 mobile app is a seamless experience. The app’s quote tabs enable users to access up-to-date prices and quotes and swiftly examine the bid-ask differential, trading volume per asset, and charts displaying past pricing trends.

Why should I Buy Stocks?

Investing in stocks can be a smart move for anyone looking to build long-term wealth. Despite the risks, the potential gains can far outweigh the losses if you invest wisely and with a long-term perspective. Buying stocks online is not just a means of potentially earning higher returns but also serves as an effective strategy to safeguard your wealth against inflation and generate a steady stream of passive income. Furthermore, identifying good shares to buy necessitates conducting comprehensive research into the company’s financials, industry trends, and market conditions. Unlike other investment options like bank certificates of deposit or gold, stocks have offered a historical average return of 10% annually since 1926. In addition, the long-term inflation rate has been around 3.1% annually since 1913, making stocks a great way to hedge against inflation.

Moreover, many companies pay dividends to investors, providing an opportunity to earn regular passive income. Dividend payments can supplement your income, making stocks a wise investment.

Is Buying Stocks Worth the Risk?

When considering how to buy stocks for beginners, it’s essential to do due diligence and assess the associated risk. Investing in stocks does come with risks, primarily market volatility. Share prices can fluctuate rapidly due to a variety of factors, such as economic conditions, company performance, and investor sentiment. This can lead to either gains or losses for investors.

Additionally, investing in individual stocks carries company-specific risks such as poor management, product failures, and legal issues. However, for most people, the benefits of investing in stocks outweigh the risks. Moreover, the potential for higher returns compared to other investment options, protection against inflation, the ability to earn regular passive income, diversification, and the ability to start small are all compelling reasons to consider investing in stocks.

Despite the risks, investing in the stock market is a successful investment strategy for many individuals. Since their initial public offering (IPO), numerous stocks have appreciated in value. For example, Amazon’s stock has increased over 3000% since its IPO in 1997, while Tesla’s stock has increased over 1800% since its IPO in 2010. It’s worthwhile to note that timing the market is less important than time in the market, and picking the right stocks is key.

What Reddit and Quora Say About Buying Stocks from Hong Kong

Reddit and Quora are two social platforms where users post, comment, vote, and discuss various topics. Let’s find out what users say about how to buy stocks from Hong Kong on the two platforms.

Reddit

While searching through Reddit, a social media platform where users can share content and engage in discussions, we came across a variety of opinions regarding buying shares from Hong Kong. Some users reported trading shares listed on the Hong Kong Stock Exchange (HKEX), while others preferred investing in international shares, as they found HKEX more expensive.

This user on Reddit commented on the query of how to buy shares on the Hong Kong exchange that HKEX charges higher fees than other exchanges, so it’s better to look for ADRs (American Depository Receipts) of those companies on US markets.

Quora

Quora is an online community platform where users can ask questions, share knowledge and insights, and engage in discussions on a wide variety of topics. Unlike Reddit, users on Quora look fond of buying shares listed on the Hong Kong exchange, and they view buying shares as a straightforward process.

This Quora user provided a step-by-step guide on how to buy stocks in Hong Kong. In her opinion, it’s an easy process to buy HK shares, and a few attractive factors of Hong Kong stocks include dividends, valuation and mainly exposure to china.

Another Quora user commented on the query of how to buy stocks in Hong Kong that there are five kinds of brokers in HK. In her opinion, a local bank account is optional, but it could bring convenience.

Bottom Line

Ready to invest in Hong Kong’s dynamic financial markets and grow your stock portfolio over the long haul? Before taking the plunge, remember to conduct thorough research into the fundamentals of each stock, such as its P/E ratio and recent earnings reports.

To buy shares, gaining a fundamental understanding of the stock market, conducting thorough company research, selecting a reliable brokerage, executing trades, and regularly monitoring your portfolio are all crucial steps towards achieving your financial aspirations through smart investment decisions. In essence, conducting due diligence and making well-informed choices is indispensable.

If you are considering how to buy stocks from Hong Kong, remember to choose a stock broker wisely. Look out for key factors like fees, regulations, supported stocks, account minimums, and core trading tools and platforms to make sure you’re getting the best bang for your buck. With these tips, you’ll be well on your way to making shrewd investment decisions in Hong Kong.