It has been more than a month since I last posted something here eh? What trigger me to write about the China stock market today? To make a long story short, I have been telling friends about investing in the Hong Kong and China markets few months back. But as the procedure to start a share trading account overseas is tedious, many have ignored my recommendations back then. Anyway, as these 2 markets have performed extraordinarily well for the past few weeks (and our market has lagged like dead fish), they are just too hard to be ignored anymore. Whether have these markets reached their peaks and due for correction is another debatable topic. Putting that worry aside, if one still see good future on these markets, there are at least 3 ways to participate in them:
(1) As mentioned earlier, open an overseas share trading account. I suggest those trading houses from Singapore or Hong Kong. They have very established trading platforms and payment systems which allow all transactions to be made through the Internet. Or, some local stock broking houses do allow share tradings in overseas counters. Please check with your brokers for details. I know Hwang DBS and OSK do provide such services.
(2) Buying unit trusts. There are plenty of unit trusts launched by investment banks recently that have exposure to the Chinese markets. This is an easier alternative as one don't have to worry about which stock or industry to choose from. Let the "experts" take care of your problem, but of course you need to pay them management fees. I must also clarify in advance, not that I am against fund managers (I am considered a small time, unqualified, fund manager myself anyway), but "most" funds underperformed the market, even without the management and loading fees. Why do they underperformed? That would be another long topic. Readers of books written by Peter Lynch, The Motley Fools and etc would understand why.
(3) The most risky but easiest alternative is to buy the covered warrants/structured warrants listed on our Bursa. Although the choices are very limited, the underlying companies are considered the stronger and more established ones. I would not recommend investing in these warrants until one have understand the mechanism and risks involved. Basically, it is a leveraged instrument that allow the holders to profit from an increase of the underlying share price. Of course, the downside risk is also relatively bigger compared to ordinary shares. The list of structure warrants and all their profile can be found at the homepage of Bursa Malaysia, here.
(1) As mentioned earlier, open an overseas share trading account. I suggest those trading houses from Singapore or Hong Kong. They have very established trading platforms and payment systems which allow all transactions to be made through the Internet. Or, some local stock broking houses do allow share tradings in overseas counters. Please check with your brokers for details. I know Hwang DBS and OSK do provide such services.
(2) Buying unit trusts. There are plenty of unit trusts launched by investment banks recently that have exposure to the Chinese markets. This is an easier alternative as one don't have to worry about which stock or industry to choose from. Let the "experts" take care of your problem, but of course you need to pay them management fees. I must also clarify in advance, not that I am against fund managers (I am considered a small time, unqualified, fund manager myself anyway), but "most" funds underperformed the market, even without the management and loading fees. Why do they underperformed? That would be another long topic. Readers of books written by Peter Lynch, The Motley Fools and etc would understand why.
(3) The most risky but easiest alternative is to buy the covered warrants/structured warrants listed on our Bursa. Although the choices are very limited, the underlying companies are considered the stronger and more established ones. I would not recommend investing in these warrants until one have understand the mechanism and risks involved. Basically, it is a leveraged instrument that allow the holders to profit from an increase of the underlying share price. Of course, the downside risk is also relatively bigger compared to ordinary shares. The list of structure warrants and all their profile can be found at the homepage of Bursa Malaysia, here.
Good luck..
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