SINGAPORE – Investors in Singapore now have a new option to invest in companies listed in Hong Kong.
The Singapore Exchange (SGX) on Oct 30 announced that it is extending its Singapore Depository Receipt (SDR) coverage to include five Hong Kong-listed companies.
These are Chinese tech giants Alibaba.com and Tencent, Chinese electric carmaker BYD, Chinese state-owned Bank of China and HSBC.
While investors here can already trade Hong Kong-listed stocks directly through their brokers, Ms Serene Cai, head of securities trading at SGX Group, said the SDRs will give them the option to do so with smaller investment amounts.
“We are increasing accessibility and affordability for investors,” she said.
SDRs are financial instruments that represent ownership in a foreign stock or security, but which are listed on the SGX.
The concept is similar to American depository receipts of non-US companies listed on the US stock exchanges.
The five new Hong Kong SDRs will allow investors to gain exposure to one of China’s largest electric vehicle makers, companies involved in artificial intelligence (AI) and some of the country’s biggest banks.
Mr Alvin Chow, assistant director of investment advisory at financial advisory firm iFast Global Markets, said the Alibaba and Tencent SDRs will broaden the tech investment choices available on the SGX, given that there are fewer tech stocks on the local exchange compared with other major markets.
The two tech companies will also give local investors the opportunity to invest in the adoption of AI and gain exposure to other parts of the AI value chain, said Ms Cai.
She added that BYD will broaden the number of EV offerings on the SGX, where one of the few EV-related stocks is manufacturer Nio, which launched a secondary listing on the SGX on May 20, 2022. Another is Thai SDR Delta