SGX Expands Hong Kong SDR Offerings; SMCI Soars 8.5% Leading Chip Stock Rebound

The Singapore Exchange (SGX) has expanded its suite of Hong Kong Singapore Depository Receipts (SDRs), offering investors greater access to regional markets and prominent Hong Kong-listed companies. The new SDRs, launched on 30 October 2024, cover five leading Hong Kong stocks: Alibaba (SGX: HBBD), Bank of China (SGX: HBND), BYD (SGX: HYDD), HSBC (SGX: HSHD), and Tencent (SGX: HTCD). This move complements SGX's existing Thai SDRs and provides investors with a more diversified range of investment opportunities.



The newly launched Hong Kong SDRs offer several benefits to Singapore investors, including:

1. Convenience and accessibility: Trading, clearance, and settlement happen during Singapore trading hours and are handled by Phillip Securities and SGX, making it more convenient for Singapore investors. Local brokerage and exchange fees apply, eliminating the need to worry about overseas trading fees, foreign exchange fees, or management fees. Dividends are paid out in Singapore Dollars.
2. Lower investment threshold: Each SDR provides holders with a beneficial interest in the underlying security and can be converted through an issuance and cancellation process. The SDR ratio allows investors to purchase shares at a lower cost compared to buying directly on the Hong Kong Stock Exchange (HKSE). For example, BYD's board lot size is 500 shares, requiring a minimum investment of S$25,000. With the SDR ratio of 10:1, investors can own a piece of the EV company with a minimum outlay of S$500.
3. Diversification: The new Hong Kong SDRs cover a wide range of industries, including technology, banking, and electric vehicles, providing investors with adequate diversification.



Meanwhile, Super Micro Computer (SMCI) stock ended Tuesday's trading with big gains, up 8.5% after a significant sell-off the previous day. The company's share price closed out the session up 8.5% after being up as much as 12.6% earlier in the day. Investors bought back into some artificial intelligence (AI) stocks, including SMCI, after measuring risk factors surrounding new tariffs and other bearish catalysts. The company's share price also got a boost from news that Taiwan Semiconductor Manufacturing will spend $100 billion to build five new chip fabrication plants in Arizona.



The expansion of Hong Kong SDRs by SGX provides investors with a more diversified set of investment opportunities across various industries, while the rebound in SMCI stock reflects the broader chip stock recovery. As investors continue to seek exposure to regional markets and prominent companies, the new SDRs and the chip stock rebound highlight the potential for growth and diversification in the region.