To The Moon

🌟🌟🌟I am super excited that the Singapore Exchange (SGX) has just launched 5 Hong Kong SDRs  on October 30.    SDR stands for Singapore Depository Receipt.  A SDR is a financial instrument that allows investors to gain ownership in a foreign stock while trading on the SGX.

The 5 Hong Kong SDRs are Tencent, Alibaba, BYD, HSBC and Bank of China.   These 5 SDRs are mega cap companies and are market leaders in their respective industries.

Tencent $Tencent HK SDR 10to1(HTCD.SI)$ is one of China's largest technology companies that develops innovative products and services. These includes video games, social networks, music, Web portals, ECommerce, mobile games, Internet services, payment services, smartphones and multi player online games.   Tencent is also China's largest social media company with WeChat capturing  90% of the population in market share. 

Alibaba $Alibaba HK SDR 5to1(HBBD.SI)$  is China's largest ECommerce conglomerate.  Its Taobao and TMall have over 800 million users monthly with a huge 42% market share.  Alibaba is also into Cloud Computing, Logistics, Digital media and entertainment.  In March 2023, Alibaba announced a restructuring plan that reorganised its business structure into 6 independently run entities.  Each business unit has its own CEO and Board of Directors and can seek its own fundraising and market listings.

Alibaba's restructuring would improve agility in decision making and market responsiveness.  It would also unlock more value for investors especially if the units would offer IPOs in the future. 

Bank of China $Bank of CN HK SDR 1to1(HBND.SI)$ is one of the Big 4 Chinese Banks and state owned with over 550 overseas branches in more than 60 countries and regions.

HSBC $HSBC HK SDR 5to1(HSHD.SI)$  or The Hongkong and Shanghai Banking Corporation is a global financial services organisation that provide a range of banking and financial services. HSBC is one of the world 's largest banking and financial services organisations with over 41 million customers worldwide covering a network that encompasses 60 countries and territories.

BYD $BYD HK SDR 10to1(HYDD.SI)$ is the largest Chinese EV manufacturer.  BYD also produces rechargeable batteries for a variety of uses. These include batteries for EVs, mobile phones.  In addition to that, BYD produces solar panels, semiconductors, electric buses and trucks. 

BYD overtook Tesla on revenue for the 1st time on Q3 24.  BYD's revenue climbed 24% to USD 28.2 billion compared to Tesla's Q3 revenue of USD 25.18 billion.

Why  would I prefer to invest in Singapore's newly listed Hong Kong SDRs instead of investing directly on the Hong Kong Stock Exchange?

One of the main reasons is that there is no necessity to exchange Singapore Dollars for Hong Kong Dollars.  There is also the ease of just trading in the SGX without incurring overseas trading fees.  Dividends will also be paid in Singapore dollars too. 

The other advantage for me as a small investor, is the lot sizes between the Singapore SDRs versus the Hong Kong lot sizes. 

Tencent and BYD SDRs have a 10:1 ratio to their underlying shares.  Alibaba and HSBC SDRs have a 5:1 ratio while  Bank of China SDR has a 1:1 ratio. 

Take for example for BYD, the Hong Kong lot size is 500 shares versus 100 shares for BYD SDR.  The current BYD HK share price is HKD 283.00 which works out to be HKD 141,500 for board lot size of 500.  That translates to SGD 24,290 required to invest in BYD Hong Kong.  In contrast BYD SDR is SGD 4.82.  To invest in BYD SDR a minimum amount of SGD 482 is required to invest in Singapore.  That is a huge difference between the 2 stocks and the investment required. 

The new HK SDRs are a game changer, offering small investors like me  to tap into the massive potential of Hong Kong's best companies.   Maximum Value at Minimum Cost!  That's how I like to invest. 🚀🚀🚀🌛🌛🌛🌈🌈🌈💰💰💰

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