How to Buy Hong Kong Stock in Malaysia

With the increasing integration of global financial markets, more and more Malaysian investors are looking at overseas investment opportunities, especially the neighbouring HK stock market. The HK stock market is not only one of the most important financial centres in Asia, but also has a sophisticated regulatory system and a high degree of market transparency.

The Hong Kong Hang Seng Index (HSI), a key indicator of the performance of the HK stock market, reflects key market trends and investor sentiment. The HK stock market is undoubtedly an attractive option for Malaysian investors seeking a diversified portfolio with high growth potential.

In this article, we will explain in detail how to buy HK stocks in Malaysia, including market overview, reasons to invest, buying process, popular sectors and stock recommendations, and how to trade through the moomoo platform. Whether you are a novice investor or a seasoned investor, this article will provide you with guidance and practical advice to help you enter the HK stock market smoothly.

What is HK Stock Exchange?

The HK stock market is one of the most important financial markets in Asia, with a long history and a mature market system. Since its establishment in the late 19th century, the HK stock market has undergone a number of significant changes and has gradually developed into an important investment destination for global investors. The Hong Kong Exchanges and Clearing Limited (HKEx) is Hong Kong's premier securities and derivatives exchange, responsible for the management and operation of the HK stock market.

Major Indices

The primary benchmark that represents the performance of the HK stock market is the Hang Seng Index (HSI). The HSI covers the most representative and liquid companies listed on the HK stock exchange and reflects the overall performance of the HK stock market. In addition to the HSI, other important indices include the Hang Seng China Enterprises Index (H-share Index), which tracks mainland Chinese companies listed in HK stock exchange. The Hang Seng Tech Index, which focuses on leading companies in the technology sector.

Market Size

The HK stock market has a large market size, with a market capitalisation of over HK$40 trillion and an average daily turnover of over HK$100 billion as of the end of 2023. The HK stock market attracts investors from all over the world, including institutional and individual investors. Listed companies in the market cover a wide range of sectors, including financials, real estate, technology, consumer goods and healthcare, providing investors with a wealth of investment choices.

Market Features

The HK stock market is well known for its high liquidity, good market transparency and stringent regulation. It is not only a gateway for international investors to enter the Chinese market, but also an important platform for Chinese enterprises to raise funds overseas. The HK stock market is highly internationalised, attracting many international companies to list here and providing global investors with diversified investment choices.

Why Invest in Hong Kong Stocks?

Investing in HK stocks can offer unique opportunities and significant advantages to global investors. Below are some of the key reasons why the HK stock market is a worthwhile place to consider for investment.

Economic Growth Potential

The growth potential of HK stock market is closely related to its closely linked Mainland China economy. China, the world's second largest economy, has provided strong support to the HK stock market with its sustained economic growth. By investing in HK stocks, investors can gain direct exposure to this fast-growing economy and share the dividends of its growth.

Regulatory Environment and Market Stability

The HK stock market is subject to stringent regulation to ensure transparency and fairness in trading. As one of the world's leading stock exchanges, the HKEx is trusted by investors around the world for its independent operation and strong regulatory framework. This stability provides investors with a secure investment environment.

Convenience of Investment Channels

Through interconnection mechanisms such as the Shanghai-Hong Kong Stock Connect, capital flows between the stock markets of Mainland China and Hong Kong have become more convenient, providing investors with more investment choices and opportunities. The maturity and sophistication of this mechanism has enabled more investors to participate in the HK stock market, and at the same time provided the market with more liquidity.

How to Buy Hong Kong Stocks in Malaysia

For Malaysian investors, investing in the HK stock market is a diversified and international option. Here are some steps and considerations to help you understand how to buy HK stocks in Malaysia.

Choosing the Right Trading Platform

Choosing a reliable and suitable trading platform for you is the first step. There are many well-known platforms in the market, such as moomoo. these platforms provide a convenient account opening process and a wealth of investment tools to help investors access the Hong Kong stock market with ease. When choosing a platform, consider factors such as security, fees, user experience, and customer service.

Opening a Trading Account

You will need to open a trading account on the selected trading platform. Opening an account generally requires registration, submission of information and completion of verification.

Funding

Most trading platforms support a variety of deposit methods, users can choose the appropriate method. Then follow the guidelines of the platform to transfer the funds from the bank account to the designated account of the trading platform. After the funds arrive, you can check the balance in your trading platform account.

Currency and Tax Considerations

Malaysian investors need to consider currency exchange rates and tax implications when investing in HK stocks. Fluctuations in currency exchange rates, capital gains tax, and dividend tax can all affect your investment returns.

Place Orders and Manage Positions

Investors can place orders to buy HK stocks through the trading platform based on their own investment strategies and market research. After investing, you can monitor your portfolio through the trading platform and make adjustments according to market changes.

Top 8 Hong Kong Sectors

The HK stock exchange covers a wide range of industries, providing investors with a wealth of investment choices. Below are the eight major sectors of the Hong Kong stock market selected on the basis of the combined factors of growth, market capitalisation and popularity, each with its own unique characteristics and development prospects.

Finance Sector

The financial sector is one of the largest and most influential sectors in the HK stock exchange, covering a wide range of sub-sectors such as banks, insurance companies and asset management companies. Companies in this sector not only serve the local HK market, but also reach out to Mainland China and other parts of Asia through the platform of Hong Kong.

China's four largest banks

HSBC Holdings plc

HSBC Holdings is one of the world's largest banking and financial services organisations, with businesses, covering retail banking, commercial banking, global banking and capital markets, and wealth management.

China Life Insurance Co. Ltd.

China Life ranks among China's top insurance enterprises, offering a wide array of insurance solutions such as life coverage, health policies, accidental protection, and retirement insurance.

China International Capital Corporation Ltd. (CICC)

CICC is the first Sino-foreign joint venture investment bank in China. Its business includes investment banking, equity trading, debt management, asset stewardship, private capital, and wealth administration.

AIA Group Ltd. (AIA)

AIA stands as a prominent insurer across Asia, specializing in a variety of protection and financial solutions. Their offerings life insurance, health insurance, accident insurance, and savings plans.

Technology Sector

The technology sector of the HK stock exchange is a vibrant and innovative sector that plays an important role in driving economic growth and market development. The technology sector encompasses a range of companies that are highly relevant to the technology theme, including internet, fintech, cloud computing, e-commerce and digitalisation.

Tencent Holdings Ltd.

As one of China's leading Internet technology companies, Tencent's core businesses include social media platforms (e.g. WeChat and QQ), online games, digital payments (e.g. WeChat Pay), cloud computing and artificial intelligence.

NetEase Inc.

NetEase is not only an online game development and publishing company, but also owns an online music platform, a smart learning platform, a self-owned quality e-commerce brand, an information and media platform, and an email service.

Baidu Inc.

As an Internet search engine provider, Baidu offers users comprehensive information retrieval services. In addition to the search engine, Baidu is also involved in online advertising, map services (e.g. Baidu Maps) and voice assistants (e.g. Xiaodu Assistant).

Xiaomi Corporation

Xiaomi is a leading consumer electronics and smart manufacturing company focused on smartphones, smart devices, and IoT platforms. In addition to hardware products, Xiaomi also provides internet services as well as New Energy Vehicles.

Semiconductor Manufacturing International Corporation (SMIC)

As the largest foundry in China, SMIC provides advanced semiconductor manufacturing services covering a wide range of process nodes from 0.35um to 14nm.

Lenovo Group Ltd.

Lenovo Group is a global technology company founded in China that provides users with smart terminals that integrate applications, services and best-in-class experiences, as well as powerful cloud infrastructure and industry intelligence solutions.

BiliBili Inc.

BiliBili is a comprehensive video community for the young generation in China, providing rich and diversified video content covering animation, comics, games, music, technology, life and other fields.

Retail Sector

The retail sector is an important part of the HK stock exchange, covering a wide range of subsectors such as traditional retailing, e-commerce and modern retailing. Hong Kong's free trade policy, tax incentives and ample consumer market have attracted many retailers.

Alibaba Group Holding Ltd.

As the world's leading e-commerce and technology company, Alibaba has a number of well-known platforms and businesses under its umbrella, including Taobao, Tmall, Alipay and Aliyun. The business covers a wide range of areas including e-commerce, finance, logistics, cloud computing, digital entertainment and health.

JD.com Inc.

JD is China's leading self-operated e-commerce company, with business covering three major segments: e-commerce, finance and logistics.

Meituan

As a local life service platform, Meituan provides services including food and beverage takeout, hotel booking, travel tickets, movie tickets, shared bikes and taxi services.

Mingchuang Premium Group Holding Ltd. (MINISO)

MINISO is a Chinese retail brand that specializes in lifestyle products. Its product lines cover a wide range of areas such as home, lifestyle, beauty and food, with its design, practicality, high quality and low price as its main selling points.

Energy Minerals Sector

The energy sector is an important area in the HK stock exchange, covering a wide range of sub-sectors such as oil, gas, power and renewable energy. As the global demand for sustainable energy increases, companies in Hong Kong's energy sector are actively transforming themselves to promote the development of green energy.

China National Petroleum Corporation Ltd.

PetroChina is the leading company in China's oil and gas industry, with its business comprehensively covering the upstream, midstream and downstream of the oil and gas industry.

China National Offshore Oil Corporation Ltd. (CNOOC)

CNOOC is China's largest offshore crude oil and natural gas producer, with abundant resource reserves and advanced extraction technologies in many domestic and international waters.

China Shenhua Energy Co. Ltd.

Shenhua is the world's leading coal-based integrated energy listed company, mainly operating seven business segments: coal, electric power, new energy, coal chemical industry, railroads, ports and shipping.

China Petroleum and Chemical Corporation (SINOPEC CORP.)

SINOPEC is China's largest supplier of refined oil products and petrochemicals, and is a mega energy and chemical conglomerate integrating upstream and downstream, production, supply and marketing, domestic and foreign trade.

Communications Sector

The telecommunications industry in the HK stock exchange is a highly competitive and fast-growing sector. As a major communications hub in Asia, Hong Kong is home to a number of strong telecommunications companies covering a wide range of sub-sectors, including mobile communications, fixed communications, Internet services and telecommunications equipment manufacturing.

Transportation Sector

By virtue of its strategic location, Hong Kong is a major trade and logistics hub connecting the East and the West. The transportation sector is a key economic pillar of Hong Kong, encompassing a wide range of sub-sectors such as shipping and ports, air services, logistics, etc.

COSCO Shipping Holdings Co. Ltd.

COSCO specializes in shipping and terminal operations, and its business scope includes container transportation, terminal investment management, and international freight forwarding business.

MTR Corporation Ltd.

In addition to railroad operations, MTR is also involved in various fields such as property development, property leasing and management, advertising, telecommunication services and international consultancy services.

ZTO Express (Cayman) Inc.

ZTO Express is a comprehensive logistics service enterprise with express delivery as its core business, integrating cross-border, express transportation, cloud warehouse, cold chain, finance, commerce and other ecological sections.

JD Logistics Ltd.

JD Logistics is a technology-driven supply chain solution and logistics service provider, offering services including warehousing, distribution, cross-border logistics, and supply chain management.

NEVs Sector

With the global emphasis on environmental protection and sustainable development, the new energy vehicle industry has ushered in new development opportunities. The HK stock market brings together a number of new energy vehicle brands, covering electric vehicle manufacturers, battery suppliers and related technology companies.

BYD Co. Ltd.

BYD is a high-tech enterprise with businesses spanning four industries: automotive, rail transportation, new energy and electronics, engaging in new energy vehicles, traditional fuel vehicles, secondary rechargeable batteries and photovoltaic business.

LI AUTO Inc.

LI AUTO is dedicated to crafting premium intelligent electric vehicles, overseeing every aspect from conceptualization and engineering to production and distribution.

Geely Automobile Holdings Ltd.

Geely is one of China's leading automakers, offering a wide range of models including sedans, SUVs and new energy vehicles. It owns brands such as Geely, LYNK, and Zeekr.

Xpeng Inc.

Xpeng specializes in the design, development, manufacture and marketing of intelligent electric vehicles, and its products include a number of models such as the P7, G3 and P5.

NIO Inc.

NIO specializes in the development and production of high-performance, intelligent electric vehicles, and its products include a variety of models such as the ES8, ES6, EC6 and ET7.

Consumer Sector

The consumer sector is a diversified and wide-ranging area of investment opportunities, covering a wide range of areas from everyday consumer goods to optional consumer goods, including a number of sub-sectors such as food and beverage, apparel, retail, and travel.

Nongfu Spring Co. Ltd.

Nongfu Spring is committed to providing natural and healthy drinking water and beverage products, and its product line covers a wide range of categories such as packaged drinking water, tea beverages, fruit juice beverages and functional beverages.

Anta Sports Products Ltd.

Anta offers a wide range of products including sports shoes, apparel and accessories covering both professional and leisure sports.

Li Ning Co. Ltd.

Li Ning is a professional sports brand, covering products such as sports shoes, sportswear and accessories, integrating R&D, design, production and sales.

Vitasoy International Holdings Ltd.

Vitasoy is a company that specializes in the production and distribution of plant-based foods and beverages, offering a wide range of products including soy milk, plant-based milk, beverages and health foods.

Ctrip Group Ltd.

As an online travel service provider, Ctrip's comprehensive range of travel products and services operates Ctrip, Qunar, Trip.com, and Skyscanner.

Haidilao International Holding Ltd.

Haidilao is a Chinese hot pot restaurant chain that offers attentive service and innovative dishes.

Top 10 Hong Kong Stocks to Watch

The HK stock market is a market full of opportunities for Malaysian investors. Below are the top 10 HK stock exchange stocks to watch out for, covering a wide range of industries, taking into account the latest market data, industry position and popularity as of 29 November 2024.

Buy Hong Kong Stock with Moomoo Malaysia

Moomoo, as an online trading platform, provides Malaysian investors with a convenient, low-cost way to invest in the HK stock exchange and other markets around the world.

Comprehensive Market Information

Moomoo offers Screener screening tools, fundamental and technical analysis, sector segmentation and other features. These features eliminate the need for investors to subscribe to paid packages on other platforms, providing a one-stop solution for investment analysis.

Powerful Research Tools

The moomoo platform has a wealth of built-in research tools, including financial statements, company news, analyst ratings, and more. These tools can help investors gain a deeper understanding of company fundamentals and assess the value of their investments. In addition, the platform provides a variety of technical analysis tools to help investors capture market trends.

Real-time Customer Service Support

The moomoo platform provides 24/7 online customer service support. Users can contact customer service via chat, phone or email. Whether it's a problem encountered during the account opening process or a question about trading operations, the customer service team will provide timely assistance to ensure that the user's investment experience is smooth and unobstructed.

Security and Regulation

Moomoo ensures the security of trading by maintaining strict segregation of user funds from the company's finances through an escrow account. In addition, Moomoo Malaysia is accredited by the Securities Commission Malaysia (SC) and has a Capital Markets Services License (CMSL), which guarantees the legitimacy and security of transactions.

Conclusion

In this article, we explore the steps and strategies involved in how Malaysian investors can enter and invest in the HK stock market. From understanding the basics of the HK stock market, to choosing a trading platform, to the specific stock buying process, we provide a comprehensive guide designed to help investors take the first step in investing in the HK stock market. However, investing in the HK stock market comes with certain risks, including market volatility, exchange rate risk and possible information asymmetry.

Before entering the HK stock market, investors should fully understand the associated risks and formulate a suitable investment strategy based on their own risk tolerance and investment objectives. Investors are advised to keep abreast of market developments, conduct in-depth market research and consider consulting a financial advisor to ensure that they make informed investment decisions. While the HK stock exchange offers a wealth of investment opportunities, investors should bear in mind that any investment comes with risks. Therefore, risk management and asset allocation are the keys to successful investment.