Investing in Hong Kong Blue-Chip Stocks Made Easy with Singapore Depository Receipts (SDRs)

Singapore investors can now invest in popular Hong Kong companies like Ping An Insurance, Meituan, and Xiaomi through Singapore Depository Receipts (SDRs). Launched by the Singapore Exchange (SGX) in partnership with Phillip Securities, this new option makes it easier to invest in sectors like artificial intelligence (AI), electric vehicles (EV), e-commerce, and finance.

SGX Offers Easy Access to Hong Kong’s Top Stocks for Singapore Investors Through SDRs

What Are SDRs?

SDRs are a type of financial instrument that lets investors buy shares from foreign companies without directly dealing with overseas stock exchanges. They can be traded on the SGX in Singapore dollars, during local trading hours, and under domestic regulations, making them simple and convenient for Singapore investors.

How Do SDRs Work?

Each SDR represents a set number of shares in a foreign company. These shares are held by a custodian in the company’s home country, but the custodian manages them for the benefit of the SDR holder. SDR holders can earn dividends and other economic benefits but don’t have voting rights in the company.

Benefits of SDRs

• Easier to Trade: SDRs can be traded like regular Singapore stocks using local brokerage accounts, without needing a foreign trading account.

• Lower Fees: Trading SDRs usually involves lower fees compared to buying stocks directly from foreign exchanges.

• Local Custody: SDRs are stored with Singapore’s Central Depository, adding extra security for investors.

  
  

Risks to Consider

One downside of SDRs is currency risk. For example, if a foreign currency weakens against the Singapore dollar, it could affect the returns on SDR investments.

Conclusion

SDRs make it easier for Singapore investors to access global markets, offering a simple way to invest in foreign companies like those in Hong Kong and Thailand. With lower fees and no need for overseas accounts, SDRs are a convenient option for diversifying your portfolio. However, investors should be aware of currency risks when investing in SDRs.