Beginner's Guide: The Complete Guide to Investing in Hong Kong Stocks in Taiwan

Want to invest in Hong Kong stocks from Taiwan but don’t know where to start? As one of the world’s top three financial centers, the Hong Kong Stock Exchange attracts investors worldwide. Currently, there are over 2,600 listed companies with a total market value exceeding $7 trillion USD, including well-known firms like Tencent, Alibaba, and BYD. This article will guide you through how Taiwanese investors can buy Hong Kong stocks and choose the investment method that suits them best.

Why Taiwanese Investors Should Pay Attention to the Hong Kong Stock Market

Hong Kong, as Asia’s financial hub, offers unique advantages. Compared to Taiwan stocks, Hong Kong stocks include companies from 26 countries, providing a broader selection. Many high-quality Chinese companies choose to list in Hong Kong, making it easier for Taiwanese investors to access Chinese concept stocks.

Additionally, Hong Kong stocks operate under a T+0 trading system, meaning stocks bought on the same day can be sold the same day, offering greater trading flexibility. There are no daily price limits, so prices are entirely market-driven, which presents both opportunities and challenges for experienced investors.

Three Main Ways for Taiwanese Investors to Invest in Hong Kong Stocks

There are three primary methods suitable for different risk tolerances and investment experience levels.

Method 1: Direct Purchase of Individual Stocks

The traditional way is buying Hong Kong stocks directly. Hong Kong stock codes are five digits, starting with 0; stocks starting with “08” are on the Growth Enterprise Market (GEM). According to HKEX data, main board companies are more mature and stable, suitable for beginners, while GEM stocks tend to be more volatile.

In Taiwan, you can open a sub-accounts with domestic brokers to buy Hong Kong stocks. Major brokers like Yuanta Securities, Fubon Securities, and KGI Securities offer this service, with fees typically between 0.01% and 1.5%. If you open accounts directly with Hong Kong brokers like Futu or Tiger Brokers, fees may be lower, but you need to consider currency exchange risks—these brokers require deposits in HKD or USD, incurring currency conversion costs.

Hong Kong stocks support short selling, but only for stocks on the designated short sale list (about 1,000+ stocks). Interested investors should verify whether their target stocks are eligible beforehand.

Method 2: Investing in Hong Kong Stock Index ETFs

For less risk-tolerant beginners, investing in Hong Kong stock index ETFs is a safer choice. The main indices are: Hang Seng Index (HSI) representing the overall market, Hang Seng China Enterprises Index (HSCEI) focusing on Chinese companies, and Hang Seng Tech Index (HSTECH) dedicated to technology stocks.

The Hang Seng Index is the most representative, including the 88 largest main board companies, accounting for over 60% of the market cap. Compared to index futures (which start at HKD 50,000), ETFs are more accessible for ordinary investors. Popular ETFs tracking the Hang Seng Index include the Tracker Fund (02800) and the Hang Seng H-Share Index ETF (03115), which can be traded directly through your brokerage account.

Method 3: Contract for Difference (CFD) — For Short-term Traders

For experienced short-term traders, CFDs offer higher leverage and lower trading costs. CFDs track stock prices without owning the underlying asset, with no commission—only spreads and overnight fees. Leverage can reach 1–30 times, much higher than traditional brokers’ 2–4 times.

For example, buying Tencent via traditional brokers might require thousands of dollars, but with CFDs, a few hundred dollars in margin can control the same position. However, high leverage also means higher risk, so caution is essential. Platforms like Mitrade provide CFD trading across stocks, forex, gold, cryptocurrencies, and more, all within one account.

Quick Overview of Hong Kong Stock Trading Rules

Trading Hours

HKEX has three trading sessions:

• Pre-opening (9:00-9:30): Orders can be submitted but no continuous trading
• Main session (9:30-12:00, 13:00-16:00): Continuous trading with real-time execution
• Closing auction (16:00-16:10): Similar to opening auction for order matching

Trading System

Hong Kong stocks operate under T+0 trading, but settlement (fund transfer) occurs on T+2, meaning funds from a sale on Monday are available for withdrawal on Wednesday. The minimum trading unit is 1 lot, but lot sizes vary by company; Tencent’s lot is 100 shares, while some companies have over 100,000 shares per lot.

Price Limits

Unlike Taiwan’s 10% daily limit, Hong Kong stocks have no price limit. However, HKEX has market circuit breakers to prevent excessive volatility in large stocks.

Hong Kong Stocks vs Taiwan Stocks: How Should Investors Choose?

Hong Kong’s advantages are its higher internationalization, broader company choices, and no daily price limits, allowing more flexible price movements. However, the lack of limits can lead to more dramatic fluctuations, so risk management is crucial.

Five Selected Hong Kong Blue-Chip Stocks

Investing in blue chips—large, stable, well-established companies—is recommended. Here are some notable stocks:

These companies have strong competitiveness and long-term investment value, making them good starting points.

Practical Account Opening Guide for Taiwanese Investors

Once you choose your investment method, here are the steps to open an account and start trading. Using a CFD platform as an example (a comprehensive process):

Step 1: Choose a platform and register

Select a reputable Hong Kong stock platform (like Mitrade offering CFDs), download the app or log in via web. Register with your email or phone number. You’ll receive a demo account with $50,000 virtual funds to practice.

Step 2: Complete identity verification (KYC)

To trade with real money, complete identity verification online. Prepare your ID and proof of address for quick processing.

Step 3: Deposit funds

Platforms usually support multiple deposit methods, including credit card and bank transfer. For Taiwanese investors, depositing in TWD via Visa/Mastercard is most convenient and incurs lower fees.

Step 4: Search and place orders

Use the search bar to find stocks by name (e.g., “Tencent”) or code (“0700”). Select the product, set buy or sell, specify quantity, leverage, and stop-loss/take-profit levels, then confirm and execute the order.

Risks for Taiwanese Investors in Hong Kong Stocks

While Hong Kong stocks offer abundant opportunities, they also carry risks. The absence of daily limits means prices can be highly volatile; currency fluctuations affect returns; leverage can amplify losses. Beginners should start small, learn gradually, and stay updated on market trends and policies. Choosing regulated, reputable platforms is essential for fund safety.

Now, you’ve grasped the core knowledge of how to buy Hong Kong stocks from Taiwan. Whether you choose individual stocks, indices, or CFDs, the key is aligning your strategy with your risk appetite and goals. Start your Hong Kong stock investment journey today!