Opening the doors to overseas stock markets – deep diving into the UK, US & Australia

Opening the doors to overseas stock markets – deep diving into the UK, US & Australia

Foreign investments let you diversify your portfolio through a variety of assets including stocks, bonds, and cash equivalents. It allows the investor a broader investment credit base, access to a bigger and more diverse market, and liquidity. It also helps them take advantage of the currency exchange rate between the home country and the foreign country. Something that you can definitely take advantage of when trading in stronger markets such as the UK, the US and Australia. Look closer to gauge how they can improve your capital gains beyond what's possible in the Hong Kong Stock Exchanges.

UK – signalling confidence from attractive valuation

*London Stock Exchange market capitalisation as of 10th July 2021, according to Trading Hours
**Distribution of countries with largest stock markets worldwide as of January 2021, according to Statista

What makes LSE the centre of international finance?
The LSE provides a bridge between North America and Asia and thus, connects companies and investors around the world. It is the most international of exchanges with companies from more than 60 countries listed along with being one of the oldest stock exchanges and the largest in Europe. The LSE boasts a diverse range of market participants, a larger percentage of which are FTSE 100 companies2. Thus providing a deep pool of international capital in the world. Additionally, LSE implements resilient market technology and offers world-class market surveillance and security. The exchange further enables diversification and security to investors through 1000+ exchange traded funds (ETFs) and exchange traded products (ETPs).

1 Large-cap companies are usually industry and sector leaders that are well-established and have a significant market share. They are less volatile in comparison to mid-cap and small-cap stocks.
2 FTSE 100 is a share index of the 100 companies listed on the London Stock Exchange that have the highest market capitalisation.

 

 

US - connecting a world of opportunity

*NYSE and NASDAQ market capitalisation as of 10th July 2021, according to Trading Hours
**Distribution of countries with largest stock markets worldwide as of January 2021, according to Statista

 

Which sectors in the US have been delivering higher returns?
While the markets did plummet at the onset of the pandemic, they’ve not only recovered but also covered so much more ground since. The US stock market recovery has been underscored by a forward-looking approach and it has been one of the best-performing markets. Growth has come particularly from tech stocks as firms like Tesla, Facebook, Amazon, Apple, Alphabet and Microsoft continue to rake in a significant share of revenues from outside the US.

 

3 How to get a globally diversified portfolio with just one ETF sourced from JUST ETF

 

Australia – unlocking market efficiency

*ASX market capitalisation as of 12th July 2021, according to Trading Hours
**Distribution of countries with largest stock markets worldwide as of January 2021, according to Statista

 

How the ASX became one of the biggest players in the market?

ASX's origin dates back to the 1980s when it was known as the national exchange. The current exchange however came into existence owing to the merger of Sydney Futures Exchange and the Australian Stock Exchange, which later launched a new group structure and named it the ASX Group. It operates in the bonds, equity, financial development, foreign exchange and funds markets, but is mostly known for its successes in the derivatives market. The ASX today is also among the top stock exchanges around the world and like them, facilitates electronic trading.

 

4 What is the Australian Securities Exchange (ASX)?' sourced from Corporate Finance Institute

 

Market rules: The simple summary

Your overseas investments can be impacted by global, regional and country-level macroeconomic factors and sectoral and company performance. Stay in the know about the market trends that can affect your investments on the LSE, the NYSE and NASDAQ, and ASX with regular updates from CIO insights. Catch up with your relationship manager regularly to discuss your investment portfolio.

New to DBS? Open your account and connect with an investment advisor who will walk you through the investment opportunities in overseas stock markets.

Discover more opportunities offered by the stock markets in Singapore, Japan and Canada to strengthen your overseas investment outlook!

 

Risk Disclosures and Important Notices
The information herein is for information only. DBS accepts no liability whatsoever for any direct, indirect or consequential losses or damages arising from or in connection with the use or reliance of this publication or its contents.

Investment involves risks. The information provided is based on sources which DBS Bank Limited and DBS Bank (Hong Kong) Limited believe to be reliable but has not been independently verified. Any projections and opinions expressed herein are expressed solely as general market commentary and do not constitute solicitation, recommendation, investment advice, or guaranteed return. The above information does not constitute any offer or solicitation of offer to subscribe, transact or redeem any investment product. Past performances are not indicative of future performances. You should make investment decisions based on your own investment objective and experience, financial situation and particular needs. You should carefully read the product offering documentation, the account terms and conditions and the product terms and conditions for detailed product information and risk factors prior to making any investment. If you have any doubt on this material or any product offering documentation, you should seek independent professional advice.

Securities trading is an investment. The prices of stocks fluctuate, sometimes dramatically. The price of a stock may move up or down and may become valueless. It is as likely that losses will be incurred rather than profits made as a result of trading stocks. The investment decision is yours, but you should not invest in any stock unless you have taken into account that the relevant stock is suitable for you having regard to your financial situation, investment experience and investment objectives.

Customers should be aware that the prices of the Callable Bull / Bear Contracts and Warrants may fall in value as rapidly as they may rise, and holders may sustain a total loss of their investment. The Bank does not provide securities advisory service. Any person considering an investment should seek independent advice on the investment suitability when considered necessary.

Foreign exchange involves risk. Customers should note that foreign exchange may incur loss due to the fluctuation of exchange rate.

RMB currently may not be freely convertible and is subject to exchange controls and restrictions. There is no guarantee that RMB will not depreciate. If you convert Hong Kong Dollar or any other currency into RMB so as to invest in a RMB product and subsequently convert the RMB sale proceeds back into Hong Kong Dollar or any other currency, you may suffer a loss if RMB depreciates against Hong Kong Dollar or other currency.

The information provided above have not been reviewed by the Securities and Futures Commission of Hong Kong or any regulatory authority in Hong Kong.

 

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