What to look out for when investing in HK-listed coys?

[FFNow]

For example, for SGX each lot is 1000 shares for most companies. What about HK-listed stocks?

Also, how will dividends be paid? Do we have to pay custodian fees etc?

Hope forumers who have invested in HK-listed companies can post all the things to look out for to help other forumers looking to invest in HK. I have glanced at Xtep (HK-listed sports company that sponsors UK's Birmingham football club) but didn't bother looking any further as I don't know about the red-tapes in HK.

[d.o.g.]

for SGX each lot is 1000 shares for most companies. What about HK-listed stocks?

It varies. I have seen lots of 100, 500, 1000, 2000 and also 10,000 shares. Depends on the whims of the company.

Also, how will dividends be paid? Do we have to pay custodian fees etc?

If you have an account with a stockbroker in HK you can probably do like CDP in Singapore and arrange for the money to be deposited into a bank account. With a Singapore stockbroker it varies. Most of them will send you a cheque. If you have a trust account at the broker you can have the cheque deposited into the trust account.

The local brokers charge custodian fees of $2/mth per counter.

I have glanced at Xtep

Be aware that all the sports shoe companies do channel-stuffing to boost their sales and profits before IPO. It's very obvious when you look at the trade receivables. The real sales level will only show after a year or two, when the distributors have digested the excess inventory. The sports shoe market also appears to be getting saturated as sales growth is slowing.

[pianist]

does it make sense to tap the HK stocks through the recently listed ADRs on SGX?

[hyom]

The local brokers charge custodian fees of $2/mth per counter.

To the best of my knowledge a few months ago, DBS Vickers does not charge custodian fees for Hong Kong stocks.

I have been thinking of venturing into Hong Kong stocks but backed off because of the extra charges like currency conversion, higher brokerage commission and zero interest earned on cash.

By the way, anyone here has experience using Interactive Brokers? It looks good for buying foreign stocks at first glance.

[d.o.g.]

I have been thinking of venturing into Hong Kong stocks but backed off because of the extra charges like currency conversion, higher brokerage commission and zero interest earned on cash.

All these are annoying. But if you are a long-term investor, these are only minor bumps on the road to investing success. The more important issue is whether you can keep up with corporate developments overseas.

If you do scuttlebutt, obviously that's easier when the company is in Singapore - you can literally park yourself outside a shop and count customers, or count trucks outside a factory, or ambush workers coming off-shift and talk to them. For companies in Hong Kong, you have to rely on phone calls and the occasional visit.

Even if you don't invest in Hong Kong, it can be a useful source of companies for peer comparison purposes.

By the way, anyone here has experience using Interactive Brokers? It looks good for buying foreign stocks at first glance.

I have a friend who uses it. He thinks it's great. The brokerage fees are very low (the minimum charge for HK stocks is HK$18) and they track corporate actions like dividends, tender offers etc. However there is a minimum fee of US$10/mth i.e. if your commissions that month are less than US$10, you are charged US$10.

Commissions:

http://www.interactivebrokers.com/en/p.php?f=commission

Activity Fees:

http://www.interactivebrokers.com/en/p.p...commission

[hyom]

I have a friend who uses it. He thinks it's great. The brokerage fees are very low (the minimum charge for HK stocks is HK$18) and they track corporate actions like dividends, tender offers etc.

Thank you for your reply. This gives me confidence of trying out Interactive Brokers. If IB has a local office like E*Trade, it will boost confidence for Singaporeans who can at least go to a local office to settle disputes. Unfortunately, it doesn't. However, IB looks like a good choice right now.

[FFNow]

I heard for IB the minimum sum to put into the account is $10k or something. Can someone confirm this?

[Bored in Melbourne]

I use a HK HSBC account for the HK Market although I have not been doing enough research until now, so I had just stuck to a few shares such as MTR, HKEX, HSBC. However this has not yielded good results so I am starting to take a true Value approach or I will exit the HK market to focus on my ASX listed stocks.

[soros]

I use a HK HSBC account for the HK Market although I have not been doing enough research until now, so I had just stuck to a few shares such as MTR, HKEX, HSBC. However this has not yielded good results so I am starting to take a true Value approach or I will exit the HK market to focus on my ASX listed stocks.

HSBC used to be a good growth stock during the 1980s and everyone in Hong Kong including the Amahs bought the stock. But after HSBC decided to expand into international markets , the shares haven't really met investor expectations as the shares are now at the same level as 10 years ago. I think Standard Chartered Bank shares looks more promising.

MTR is good because it has a lot of land above the stations for property development. HKEX's future is good but the share price level looks rather expensive to me.

Myself , I like low priced income stocks ( reits ) and just bought some 00405.HK - GZI Reit - as the annual results are due soon.

---

For example, for SGX each lot is 1000 shares for most companies. What about HK-listed stocks?

Also, how will dividends be paid? Do we have to pay custodian fees etc?

Hope forumers who have invested in HK-listed companies can post all the things to look out for to help other forumers looking to invest in HK. I have glanced at Xtep (HK-listed sports company that sponsors UK's Birmingham football club) but didn't bother looking any further as I don't know about the red-tapes in HK.

1. If you go to investments page at the DBS website and enter the stock number . ( See :http://www.dbs.com.hk/en/consumer/investments/ )
you can find the details ( including lot size ) for each stock. Type in 66 (for MTR ) and you will see the lot size is 500.

2. Dividends are paid in full- no withholding tax.

3. Custodian fees are payable and vary depending on bank or broker. But if you trade a lot, you can ask broker for waiver/reduction.

[soros]

As mentioned in post #9, I bought 10000 shares in No. 405 ( GZI Reit ) at HKD 4.20 per share = $42000 + additional charges . The settlement of a trade ( on Day 1) is completed on Day 3.

The additional charges are:

brokerage = $100 ( Minimum charge or 0.2% )
Transaction charge = $30
Ad Valorem stamp duty = $42
Trading fee = $2.10
Transaction levy = $1.26

Additional charges = $175.36 ( to buy )

So to buy and sell , I need to see a rise of atleast 4 cents (roughly 1% ) in the share price to cover the buying and exit costs.