How to Increase Return on Your Hong Kong Stock Portfolio How to Increase Return on Your Hong Kong Stock Portfolio How to Increase Return on Your Hong Kong Stock Portfolio

How to Increase Return on Your Hong Kong Stock Portfolio

Equities 10 minutes to read

Saxo Bank

Summary:  The Hang Seng index has rebounded by 30% since January this year and the recent retracement has provided an opportunity for investors for further adding more stocks to their existing portfolio but with limited access to capital, how can investors capture this opportunity to enhance the return of the existing portfolio with the limit of capital.


What is happening in Hang Seng Index?

The Hang Seng index has rebounded over 30% since the 22nd of January from 14,700 levels to 19,700 levels for about 5,000 points but since the 20th of May, the Hang Seng index has retraced 1,000 points for approximately 20%.


Source: Saxo

What are the catalysts for supporting the Hang Seng Index?

As what we have discussed in ourrecent Saxo Article, several points support the Hang Seng Index. The reduction of dividend tax for mainland investors in Hong Kong stocks which supports high-dividend stocks in particular Chinese banks, Telecoms, and energy companies as well as Hong Kong exchange and Chinese Securities firms. 

The Export growth of China has rebounded significantly in April. The rebound has been contributed by selling more intermediate goods to ASEAN countries and India and also China CPI inflation picked up to 0.3% y/y in April. It is driven by increases in service prices particularly in tourism-related spending, air tickets, rental vehicles, and hotel prices.

In one of our more recent article Hong Kong Equity rally surpasses global Markets. The Low valuation relative to other financial markets, underweight position, and strong performance in large-cap China tech, healthcare, property, and insurance stocks have also attracted investors to the Hong Kong Markets. 

What should you do to capitalize your existing Hong Kong stocks portfolio?

Investors who have invested in the Hong Kong stock market in their existing portfolio and still have a positive view of the current trends see the recent retracement as an opportunity to invest more. However, the limited access to capital restricts investors from capturing such opportunities. One of the tools to help our investors is using Margin Lending. 

What is Margin Lending?

Margin lending allows our investors to use their existing securities as collateral to enhance their buying power to buy more in stocks and ETF beyond the value of the cash and/or securities on their account. It works as a loan or credit facility and the amount investors can borrow depends on their financial situation and the collateral value. 

The total amount investors can borrow depends on the securities in their portfolio, each security is assigned a risk rating that determines the number of times you can leverage. Out of 82 stocks in the Hang Seng Index, there are 74 stocks, more than 90% of the stocks you can leverage more than 3 times. 


How to enable Margin Lending in Saxo Trader?

A video instruction on how to enable Margin Lending please click on this link.

For factsheet on Margin Lending, please click on Factsheet on Margin Lending.

Disclaimer

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000
Australia

Contact Saxo

Select region

Australia
Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.