As investors, we often only focus on our local stock market and the US. However, there are more opportunities to explore. With the rise of the Labubu craze, the spotlight has shone a new focus on Chinese toy company Pop Mart, and investors are turning their eyes once again to the Hong Kong Stock Exchange (HKEX). HKEX is one of the world’s most influential financial hubs, serving as a bridge between the East and West. For global investors and newcomers alike, exploring this market opens a unique window into the heart of Asia’s economic dynamism. In this article, we will look at the structure, significance, and opportunities of the Hong Kong Stock Market—and why it remains a critical player in global finance.
An Overview of HKEX
The Hong Kong Stock Exchange (HKEX), officially known as the Hong Kong Exchanges and Clearing Limited, is one of the largest and most active exchanges in the world by market capitalisation. Dating back to 1891 when it was known as the Stockbrokers' Association of Hong Kong, it has since evolved into a modern, international marketplace that lists companies from across the globe, with a special emphasis on Chinese firms.
HKEX plays a pivotal role in linking mainland China with international capital markets. It is home to over 2,500 listed companies, including many of China’s state-owned enterprises and high-growth tech firms like Tencent, Alibaba (via secondary listing), Meituan and of course Pop Mart- the home of Labubu.
Unique Features of the HK Stock Market
The HKEX has several unique features that allow investors to trade in multiple currencies and also diversify their portfolios further than just their local and US stock markets.
Dual-currency trading: HKEX allows trading in both Hong Kong Dollars (HKD) and Renminbi (RMB) for certain stocks, giving investors flexibility and access to China-related assets. Through Tiger Trade, you can easily convert AUD or USD to HKD in a few clicks, allowing you the efficiency to trade when you see your next opportunity.
The Stock Connect Program: Launched in collaboration with mainland exchanges in Shanghai and Shenzhen, the Stock Connect scheme allows mutual market access between China and Hong Kong. International investors can trade eligible A-shares listed in mainland China via HKEX, and mainland investors can access Hong Kong-listed stocks. This program has dramatically enhanced cross-border investment flows.
Diverse listings: HKEX is known for its mix of traditional industries (such as banking and real estate) and new economy sectors (e.g., tech, biotech, green energy). It has become a prime destination for Chinese tech IPOs and secondary listings of US-listed Chinese companies.
Why invest in Hong Kong?
Investors looking to invest in other markets outside of the US and ASX can look at opportunities in Asia, where emerging companies and new economy sectors are blossoming. Investing in HKEX offers investors:
Gateway to China: Hong Kong acts as a financial doorway to the mainland, offering exposure to Chinese companies under a legal and regulatory environment more familiar to international investors.
Regulatory Framework: Despite geopolitical tensions, Hong Kong maintains a legal system based on British common law, independent from mainland China, which helps enforce investor protections and transparency.
Tax Advantages: Hong Kong imposes no capital gains tax on stock transactions, making it attractive to both individual and institutional investors.
Global Investor Participation: HKEX's integration with global markets ensures deep liquidity and robust price discovery, supported by active participation from global banks, asset managers, and hedge funds.
Risks and Considerations
As with all investing, there are risks and considerations investors need to be aware of prior to investing. In Hong Kong in particular, the following considerations should be taken into account:
Geopolitical Tensions: US-China relations and evolving political dynamics in Hong Kong can influence investor sentiment and regulatory developments. Investors are urged to keep their eyes on news and current events that could influence the way the Hong Kong stock market reacts. Key changes in trading agreements, tariffs and other political influences can shape the fluctuations of the market (not just Hong Kong but elsewhere too).
Currency Fluctuations: Since trading occurs in HKD, currency risk may affect returns for investors from outside Hong Kong.
Market Volatility: Like all emerging and frontier markets, the HK stock market can be highly volatile, especially when tied to news from China.
How to get started
For international investors interested in exploring the Hong Kong stock market is easily done with the right brokerage platform. Here are a few considerations if you're looking to invest in the Hong Kong market:
Brokerage Access: Choose a broker that offers access to international markets, especially Hong Kong. Tiger Trade offers support for multiple currencies and provides convenient and easy FX conversion for AUD⇆HKD at 300 PIPS added spread per transaction. Access to the HKEX, with HKD 15 flat brokerage to buy or sell up to HKD 25,000 per order and 0.06% of trade value after that. Tiger trade allows you to trade the HKEX Monday to Friday from 9:30 am to 12:00 pm, and 1:00 pm to 4:00 pm Hong Kong Standard time (GMT + 08:00).
Trading HKEX stocks on Tiger Trade is easy and can be done in 4 steps:
Source: Tiger Trade Website
Research and tools: Familiarise yourself with Hong Kong-listed companies, sector trends, and macroeconomic indicators. Websites like HKEX.com.hk provide real-time market data and filings. With Tiger Trade, investors have access to multiple tools to assist with their research. Get in-depth market data, a demo account to practice HKEX trading and an online trading community that has many Asian market investors sharing their thoughts and trades, providing other investors with ideas and insightful discussion. The platform is designed to help investors see where potential opportunities lie and seize them.
ETFs and funds: If you want to diversify but you're wary about investing directly on HKEX, then consider Hong Kong- or China-focused ETFs that are traded on major global exchanges, giving exposure without needing to trade directly on HKEX.
For investors looking to diversify their portfolios, the Hong Kong stock market is more than just a trading platform—it’s a strategic entry point into the future of Asian finance. With its blend of East and West, old and new, and local and global, HKEX allows investors to tap into China’s long-term growth story. Whether you’re a seasoned trader or a curious beginner, discovering the Hong Kong stock market via Tiger Trade is a step toward understanding one of the most important financial ecosystems in the world.
Download Tiger Trade and gain access to the Hong Kong stock market. Plus, receive four $0 brokerage monthly trades on either ASX, US stock, ETFs or US options, when you open an account and complete your first deposit^.
^New clients & unfunded existing clients only. Only min. brokerage waived for 4 ASX, US stocks or ETFs or options trades. Third-party fees and other fees still apply. See T&Cs for details.
Capital at risk. You should only trade with money you can afford to lose. See FSG, PDS, TMD and T&Cs via our website before trading. Information provided may contain general advice without taking into account your objectives, financial situations or needs. Past performance is no guarantee of future results. Graphics and charts are for illustrative purposes only. Tiger Brokers (AU) Pty Limited. ABN 12 007 268 386 AFSL 300767
