China Stock Market Research & China Stock Analysis

China Stock Digest Research and
Investment Opportunities in China Articles

Investing in China Stocks Through the
Hong Kong Stock Market (H Shares)

Understanding the various methods in which an investor can purchase China stocks is crucial when building an effective portfolio. The Hong Kong Stock Market (HKEX) is Asia’s 2nd largest exchange, located in the heart of Hong Kong. Among the various investment share options available, H shares are those that represent mainland companies listed on the Hong Kong Stock Exchange or on another foreign exchange. Most, if not all H shares are listed on the Hang Seng China Enterprise Index.

Here is a current list of the largest 40 companies listed on the exchange based upon market capitalization:

While some companies will be listed only on one exchange, it is common in China to have securities listed in multiple share types and on multiple exchanges.

Like any exchange, there are several indices that investors both watch and invest into, most notably including the Hang Seng Index. The index is considered to both be an indication of the health of the economy, but is a solid investment choice for investors seeking large cap stocks with little portfolio management required.

With the continued expansion of the Chinese economy, new companies are regularly added to the Hong Kong exchange, as well as on international exchanges. Foreign investors can participate in the Hong Kong Stock Exchange through direct investments in Hong Kong, through China stocks on their domestic exchanges and through mutual funds that have China stocks as a part of their underlying securities.