I had a brief chat with a friend of mine last week (who has much more experienced in investing than me) about investing in general. One of the things he shared with me was opportunities available in the Hong Kong stock market currently, and companies he was looking at investing.
Inspired by his sharing, I then spent the past couple of days to conduct some researches to find out two things – companies which I’m familiar with (and I’m pretty sure you’re familiar with the companies as well) that are listed on The Stock Exchange of Hong Kong (HKEX), as well as the basics I need to know to start trading on the HKEX.
I will be sharing with you more about the former in my future posts; today, I’d like to share with you the basics you need to know to buy/sell shares of Hong Kong-listed companies:
1. Trading Hours:
The trading hours on HKEX is as follows:
Market Pre-Open: 9.00am – 9.30am
Morning Session: 9.30am – 12.00noon
Lunch Break: 12.00noon – 1.00pm
Afternoon Session: 1.00pm – 4.00pm
Market Pre-Close: 4.00pm – 4.10pm
This is slightly different from the trading hours on SGX, which is as follows:
Market Pre-Open: 8.30am – 9.00am
Morning Session: 9.00am – 12.00noon
Lunch Break: 12.00noon – 1.00pm
Afternoon Session: 1.00pm – 5.00pm
Market Pre-Close: 5.00pm – 5.16pm
2. Settlement Period:
Just like buying or selling of shares on the Singapore Exchange (SGX), the settlement period is T + 2 – meaning a trade is due for settlement 2 market days after it is made.
3. Bid Size:
For Singapore-listed companies on the SGX, if they are above $$1.00, the share price jumps by S$0.01 – and this is known as the bid size. For example, if Company A’s share price is at S$1.00, the next upward jump is by 1 cent to S$1.01. For share prices between S$0.200 and S$0.995, the bid size is S$0.005, and finally, for share prices below S$0.200, the bid size is S$0.001.
For companies listed on HKEX, the bid size is as follows:
Share Price Range | Bid Size |
HKD0.01 – HKD0.25 | HKD0.001 |
> HKD0.25 – HKD0.50 | HKD0.005 |
> HKD0.50 – HKD10.00 | HKD0.01 |
> HKD10.00 – HKD20.00 | HKD0.02 |
> HKD20.00 – HKD100.00 | HKD0.05 |
> HKD100.00 – HKD200.00 | HKD0.10 |
> HKD200.00 – HKD500.00 | HKD0.20 |
> HKD500.00 – HKD1,000.00 | HKD0.50 |
> HKD1,000.00 – HKD2,000.00 | HKD1.00 |
> HKD2,000.00 – HKD5,000.00 | HKD2.00 |
> HKD5,000.00 – HKD9,995.00 | HKD5.00 |
4. Trading Fees:
When it comes to trading stocks listed in other stock exchanges, besides brokerage fees (along with other fees being charged by the stock exchange), another thing you will want to take note is the custody fees charged by the brokerage firms to hold your shares.
Of the brokerage firms I have an account with – DBS Vickers, DBS Treasures, and FSMone, only FSMone does not have any custody fees. Also, in terms of brokerage fees, it is also lower compared to DBS Vickers and DBS Treasures.
The following table is a break down of charges for every buy/sell order on FSMone trading platform:
Item | Amount |
Brokerage Fees | 0.08%, with a minimum of HKD50.00 |
HK Contract Stamp Duty | 0.10%, rounded off to the nearest dollar (on principal amount) |
Transaction Levy | 0.0027% (on principal amount) |
Exchange CCASS Fee | 0.004%, with a minimum of HKD5.00 (on principal amount) |
Trading Fee | 0.005% (on principal amount) |
GST | 7.0% (on brokerage fees) |
The following is how fees are calculated, should you decide to buy 100 shares of Alibaba (SEHK:8866) at HKD207.00:
Item | Calculation and Amount |
Investment Amount | HKD20,700.00 (HKD207.00/share x 100 shares) |
Brokerage Fees (0.08%, with a minimum of HKD50.00) | HKD20,700 x 0.0008 = HKD16.56 (as brokerage fees is less than the minimum of HKD50.00, a minimum of HKD50.00 is charged) |
HK Contract Stamp Duty (0.10%, rounded off to the nearest dollar) | HKD20,700 x 0.0010 = HKD20.70 (if rounded up to the nearest dollar it will be HKD21.00) |
Transaction Levy (0.0027%) | HKD20,700 x 0.000027 = HKD0.56 |
Exchange CCASS Fee (0.004%, with a minimum of HKD5.00) | HKD20,700 x 0.00004 = HKD0.828 (as the fee is below the minimum of HKD5.00, the minimum of HKD5.00 is charged) |
Trading Fee (0.005%) | HKD20,700 x 0.00005 = HKD1.04 |
GST (7% on brokerage fees) | HKD50.00 x 0.07 = HKD3.50 |
Total: | HKD20,781.10 (if you convert this to SGD based on the exchange rate of HKD1.00 = SGD0.18, it will be S$3,747.59) |
Apart from checking out fees charged by the various brokerage platforms I have an account with, I also checked out fees charged by some of the other popular brokerage platforms, including SAXO, as well as the new brokerage firm Tiger Brokers – the former have a slightly higher brokerage fee compared to FSMone (at 0.15%, with a minimum of HKD90.00 for every buy/sell transaction), while the latter have a lower brokerage fee compared to FSMone (at 0.06%, with a minimum of HKD15.00 for every buy/sell transaction.)
Personally, I will be making use of FSMone to buy/sell on the HKEX, as I do not want to go through the hassle of opening another brokerage account.
5. Share Price Streaming:
Do take note that for FSMone, share price streaming for HKEX stocks is delayed by 15 minutes. For those of you who are looking to day-trade in the stock exchange, this may be a problem. However, if you, like me, are looking to invest in HKEX stocks for the mid- to long-term, then this is not a problem (at least for me.)
6. Minimum Lot Size:
For SGX, one lot equals 100 shares, and the minimum buy/sell is one lot.
However, for HKEX, the minimum lot size is dependent on the companies you’re buying/selling, and if you are using the FSMone trading platform, you can find the minimum lot size at the page where you key in your orders:

7. Tax on Dividends Paid out by HKEX-Listed Companies:
From my understanding, all dividends received (as a shareholder of Hong Kong-listed companies on the HKEX) are not taxable. Also, there are no dividend handling fees being charged by FSMone (if you use the trading platform to buy your shares.)
This is the same as dividends received from Singapore-listed companies on SGX, where they are not taxable.
In Conclusion:
For those of you who are reading this post, and have prior experience in buying or selling shares in the HKEX, is there anything else I should know that I did not list them above? Please feel free to let me know either in the comments section below, or you can send me a message here.
If you are new to the Hong Kong stock market like me, I hope today’s share will give you a better understanding of it.
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Dewei 3 June 2020 at 11:51 am
Hi JY, so any counters you or your friend is looking at in the HK market?
Jun Yuan 3 June 2020 at 11:52 am
Hi Dewei
I do have some in mind (after doing some research), which I will be sharing in my future posts – do keep a look out for it! 🙂
Best Regards
Jun Yuan
Sharon 3 June 2020 at 7:58 pm
Hi Jun Yuan,
I can’t remember where I read it but someone pointed out that although FSMOne brokerage fee is low, the SGD/HKD exchange rate is not very ideal (I guess that’s where they earn)
What are your thoughts?
Jun Yuan 4 June 2020 at 10:11 am
Hi Sharon
I am not too worried about the exchange rate at this point in time, as I am not intending to change a huge sum of money; I will start off with a small amount first. Also, if you ask me, I rather a slightly less favourable exchange rate than being charged a custody fee on a regular basis (which over time, can really “eat” into my profits.)
Just my personal 2-cents here about this issue, and hope it addresses your question. 🙂
Best Regards
Jun Yuan
Raja 8 June 2020 at 12:48 pm
Agreed, Custodian fee is a bigger issue for medium to long term investors.
How about Tiger brokers? Do you they charge a custodian fee? I know that SAXO does.
Jun Yuan 8 June 2020 at 2:25 pm
Hi Raja
From my understanding, all dividends received from companies listed on the HKEX are not subjected to taxes. If you come across any information from other brokerage firms that says otherwise, would appreciate it if you could share it with me. 🙂
With regard to Tiger Brokers, if I am not mistaken, they do not charge a custodian fee as well. Also, as I’ve shared in my post, Tiger Brokers have a cheaper brokerage fee compared to FSMone – but I’m still going with the latter, because I already have a brokerage account with them, and I do not want to have the hassle of maintaining one too many brokerage accounts.
Hope the above clarifies. 🙂
Best Regards
Jun Yuan
Raja 8 June 2020 at 12:46 pm
As far as I know Dividend is taxed for Chinese companies listed on HKEX at 10% withholding tax. Only the HK companies listed on HKEX are tax-free. Am I right?
Raja 9 June 2020 at 2:12 pm
Hi Jun Yuan, sure, here is an article explaining the 10% withholding tax on H Shares
https://www.scmp.com/article/972570/hk-holders-h-shares-pay-10pc-dividend-tax
Jun Yuan 9 June 2020 at 2:43 pm
Many thanks for the share Raja. Allow me to check this out and get back to you.
But whatever it is, don’t let it affect you from investing in HKEX-listed companies, because there are capital appreciation to be had from your investments (apart from dividends.)
Best Regards
Jun Yuan
Jun Yuan 12 June 2020 at 2:15 pm
Hi Raja
After chatting with some experienced investors who are into investing in the HK stock market, yes you are right, there is a 10% withholding tax on H-shares. But just like I mentioned in my previous reply, look beyond the dividend payouts when investing in the companies. 🙂
Best Regards
Jun Yuan
James 31 August 2020 at 11:05 am
Hi Jun Yuan,
I been active in HKSE through poems.
I have a nagging issue w poem, as they reject buy/ sell order 24 bids away from the market price.
Is there a similar restriction on FSM?
Thanks for your time!
Jun Yuan 31 August 2020 at 1:55 pm
Hi James
From my understanding, all brokerage firms work the same way – in that they do not allow you to place buy/sell orders too far away from the market price. 🙂
Best Regards
Jun Yuan