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Jemma Grist

Written By

Jemma Grist

Jemma is a writer, editor and fact-checker focused on retail trading and investing. Jemma brings a unique perspective to the forex, stock, and cryptocurrency markets and works across several investment websites as a researcher and broker analyst.

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Edited By

Tobias Robinson

Edited By

Tobias Robinson

Tobias is a partner at DayTrading.com, director of a UK limited company and active trader. He has over 25 years of experience in the financial industry and contributed via CySec to the regulatory response to digital options and CFD trading in Europe. Toby’s expertise and dedication to financial education make him a trusted voice in the industry, including a BBC investigation into digital options.

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Fact Checked By

William Berg

Fact Checked By

William Berg

William contributes to several investment websites, leveraging his experience as a consultant for IPOs in the Nordic market and background providing localization for forex trading software. William has worked as a writer and fact-checker for a long row of financial publications.

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Updated

Jun 24, 2024

Hang Seng brokers allow traders to track the changes of the 50 largest and liquid companies on the Hong Kong Stock Market. The Hang Seng Index (HSI) is a market capitalization-weighted stock market index, and whilst it is the most quoted measure of Hong Kong’s economic performance, it also attracts aspiring day traders looking to yield profits from short-term price fluctuations via online brokers.

This page will cover how to review and compare the best brokers with access to the Hang Seng. We also look at the origins of the index and its purpose, plus charts, forecasts, trading hours, and our top tips.

Comparing Hang Seng Brokers

Day trading on the Hang Seng is relatively straightforward. However, before you put your strategy to the test, you will need an online broker that can cater to your needs. But with so many Hang Seng brokers out there, how do you know what to look for? We cover some of the main considerations below:

• Cost – As an intraday trader, making a high volume of trades each day, fees and commissions can quickly add up and cut into your end of day returns. Some Hang Seng brokers will advertise a $0 fee package when trading, but bear in mind that there may be hidden charges that are applied later. So, look out for brokers offering a competitive and transparent fee structure so you are aware of all applicable costs before opening any live positions.
• Account requirements – Some Hang Seng brokers will allow you to open an account for just a few dollars, whilst others may charge hundreds. Select a brokerage with an account that suits your financial situation, particularly if you are just getting started with your investment journey. eToro, for example, has a minimum deposit requirement of just $10. Check what the minimum trade size is, plus whether you will face any charges for withdrawing your funds as this can cut into your profit margin.
• Regulation – When you’re investing your own personal money, you will want to ensure your funds are secure. The most reputable Hang Seng brokers will be regulated by the principal regulator of Hong Kong’s securities and futures markets; the Securities and Futures Commission (SFC). Nonetheless, regulatory oversight from top-tier financial authorities such as the Financial Conduct Authority (FCA) in the UK or the Securities & Exchange Commission (SEC) in the US should rank highly in your comparison.
• Platform – This is where you could spend numerous hours each day. Look for Hang Seng brokers that offer an easy to navigate platform, that has all the charting, graphing and technical tools you need to conduct your analysis. You will need access to strong trend tracking and comprehensive price history, plus information on company economics, including from those related Chinese and Asian indices. This may be the award-winning MetaTrader terminals, or bespoke software developed by leading Hang Seng brokers. Customizable yet intuitive interfaces should rank highly. Also, check for fast execution speeds. In day trading, every second counts.
• Customer service – Nobody wants to sit around all morning losing money because you can’t get customer support on the phone. Fast and reliable assistance is becoming an increasing priority for traders. During market operating hours, most Hang Seng brokers will offer comprehensive support via phone or live chat. Many Hang Seng brokers now also offer 24/7 live support, in a number of languages.

What Is The Hang Seng?

The HSI is a free float-adjusted market capitalization-weighted stock market index. It looks to represent the biggest movers and shakers found on the Hong Kong exchange. It currently accounts for around 65% of the exchange’s total market capitalization.

Members of the Hang Seng are broken down into four sub-indices:

• Finance
• Property
• Utilities
• Commerce and industry

Leading Hang Seng brokers offer stocks on companies that form each of these four industries.

A Brief History

The HSI was first published on the 24th November 1964. It is managed by Hang Seng Indexes Company Limited, a subsidiary of the Hang Seng Bank, which is headquartered in central Hong Kong. The bank is currently one of the largest banks by market capitalization listed in Hong Kong.

Its responsibilities also include the maintenance and publishing of a number of other Hang Seng stock indexes:

• China Enterprises Index
• Composite Index Series
• China AH Index Series
• Corporate Sustainability Index Series
• China A Industry Top Index
• China H-Financials Index
• Total Return Index Series

Hong Kong Stock Exchange

Its humble beginnings trace back to the founding of China’s first formal securities market, the Association of Stockbrokers in Hong Kong, in 1891, and a second market that opened in 1921, merged to create the Hong Stock Exchange in 1947.

Today you will find around 1,200 companies listed on the exchange at Hang Seng brokers. There are several key dates to be aware of:

• 1993 – This saw the introduction of automated ordering to the exchange.
• 1995 – Stock options trading was introduced.
• 2000 – The Hong Kong Stock Exchange merged with the Hong Kong Securities Clearing Company and the Hong Kong Futures Exchange to form Hong Kong Exchanges and Clearing Limited.

Economic Gauge

Whilst the index is supposed to provide a snapshot of the health of Hong Kong’s stock market, it also serves another purpose. Because of Hong Kong’s status as a special administrative region of China, both economies are closely linked.

So, the index serves as a proxy for the wider Asian market. In particular, China’s stock market, which is often mispriced as a result of capital restrictions. This also means you will find many large Chinese companies listed on the Hong Kong Exchange at Hang Seng brokers.

Related Indices

On top of the most frequently quoted Hang Seng Index, there also exist a number of other major related indices, including smallcap and midcap indexes. Note, not all Hang Seng brokers offer access to every product.

All the indices below provide access to mainland and China-affiliated companies. These are, the Hang Seng:

• China Enterprises
• China-Affiliated Corporations
• China H-Financials
• Corporate Sustainability
• Mainland 100
• HK 35
• REIT
• China 50
• H-Share Index ETF-HK
• China AH Premium
• HIS Volatility
• China A Industry Top

How It Works

Capitalization-Weighted

To understand how the Hang Seng operates, you first need to know how capitalization-weighted indices work. Quite simply, the index lists components in order of total market capitalization. So, the biggest constituents hold a higher percentage weighting, whilst the smaller constituents carry lower weights.

Many of the global markets today have indices that work in this manner. These include the FTSE 100, S&P 500, and the Nasdaq.

Calculation

Finding the value of a capitalization-weighted index is relatively straightforward. You simply need to multiply each constituents’ market price by the total outstanding shares, to give you the total market value. The size of this value in comparison to the overall market value of the listed companies, will then give you a component’s weight.

The best Hang Seng brokers offer straightforward metrics and stats on the weight of companies listed.

Classification System

The Hang Seng further divides components into different sectors. To do that, it uses the Hang Seng Industry Classification System (formerly the Hang Seng Stock Classification System), created by Hang Seng Indexes Company Limited.

Classification guidelines are relatively simple. They consider the following factors:

• Sales revenue – The primary criteria for stock classification is the sales revenue generated by each business area. On top of that, profit and assets will also be taken into account.
• Majority source of sales revenue – A company’s sector will be classed depending on its majority source of sales revenue, plus profit and assets if relevant.
• Re-classification – Updates to a stock’s industry sector can take place following a major change in a company’s business, a merger or acquisition, for example.

Below is a list of industry sectors:

• Consumer Goods
• Conglomerates
• Energy
• Financials
• Industrial Goods
• Information Technology
• Material
• Properties & Construction
• Services
• Telecommunications
• Utilities

Admission Criteria

For a Hang Seng nominee to warrant entry, they have to meet a number of criteria:

• Constituents must comprise the largest 90% of the total market value of all ordinary shares.
• They must be among those that form the largest 90% of total turnover on the Stock Exchange of Hong Kong Limited.
• They will also need to have a minimum listing history of 24 months. Alternatively, they will need to meet guidelines for newly listed large-capitalization stocks. The higher their ranking at the time of review, the less time they need to spend listed.

Once a company has ticked the initial boxes, a final decision is made based on market capitalization, turnover rankings, reflections of the sub-sectors in question, plus financial performance.

Performance

Hang Seng brokers and websites publish prices, results and key performance details. Some of the highs and lows have been as follows:

• July 31st, 1964 – When first published, the HSI had a base value of 100 points.
• August 31st, 1967 – This all-time low of 58.61 points, was after the base value was established, but before the index was published.
• December 10th, 1993 – The Hang Seng passed the 10,000 point milestone for the first time.
• December 28, 2006 – The Hang Seng passed the 20,000 point milestone.
• October 18, 2007 – Just 10 months later, the Hang Seng passed the 30,000 point mark.
• October 30th, 2007 to March 9th, 2008 – In response to the global financial crisis, the Hang Seng lost 9,426 points, around 30%.
• April 13th, 2015 – It closed at 28,016.34, the highest since 2007.
• June 24th, 2016 – In response to UK’s Brexit vote, the market fell 1,000 points.
• January 12th, 2018 – A record all-time closing high was recorded of 31,412.54. This followed 14 consecutive days of growth, reflecting investor optimism after a bumper 2017.

Biggest Players

The largest 30 constituents that have featured on the Hang Seng in recent years are as follows:

• Galaxy Entertainment Group Limited
• Hang Lung Properties Limited
• Power Assets Holdings Limited
• The Bank of East Asia Limited
• China Resources Land Limited
• Henderson Land Development Company Limited
• Lenovo Group Limited
• CK Infrastructure Holdings Limited
• BOC Hong Kong Holdings Limited
• Hengan International Group Company Limited
• CLP Holdings Limited
• China Resources Power Holdings Company Limited
• Sun Hung Kai Properties Limited
• China Mobile Limited
• The Hong Kong and China Gas Company Limited
• CITIC Limited
• AAC Technologies Holdings Inc.
• Sino Land Company Limited
• Sands China Ltd.
• AIA Group Limited
• China Mengniu Dairy Company Limited
• Industrial and Commercial Bank of China Limited
• WH Group Limited
• China Petroleum & Chemical Corporation
• CNOOC Limited
• Tencent Holdings Limited
• Wharf Real Estate Investment Company Limited
• Ping An Insurance (Group) Company of China, Ltd.

Many of the top Hang Seng brokers will provide detailed insights into leading stocks, along with key financial metrics.

Hang Seng Trading Hours

The timeline for the standard market day goes as follows:

• 09:00 to 09:30 – During premarket hours, an auction session takes place. Then the opening price of a security will be announced around 09:20.
• 09:30 to 12:00 – The morning session takes place.
• 12:00 to 13:00 – For one hour an extended morning session takes place, also known as the lunch break. This continuous trading is currently in just two securities (ETFs 4362 and 4363).
• 13:00 to 16:00 – The afternoon session takes place.

Opening hours in GMT are 02:45 – 05:30 for the first session and 07:30 – 09:15 for the second session.

Admittedly, trading from Singapore may offer more sociable working hours than if you are based in the UK or Europe, but this doesn’t appear to be deterring too many traders. Also note, no trading will take place during market holidays. This, plus all intraday timelines, will be reflected within your Hang Seng brokers calendar.

Hang Seng Live Chart

Why Day Trade The Hang Seng?

Regardless of location, in the last 10 years, an increasing number of day traders are turning their attention to Hang Seng brokers. The question is, why?

Hong Kong is a relatively free economy, not to mention one of the world’s leading financial hubs. It offers minimal taxes, international financial markets, plus low-cost port trade.

These characteristics have helped the Hong Kong Stock Exchange flourish into the sixth largest stock market in the world, and the third largest in Asia, following Japan’s Tokyo Stock Exchange and China’s Shanghai Stock Exchange.

Whilst an increasing number of traders look to buy and sell forex, speculating on Hang Seng stock price keeps things simple. For those wanting to avoid the sometimes complex world of currency trading, the Hang Seng continues to appeal. Look out for Hang Seng brokers that offer a range of instruments.

Hang Seng Futures

In May 1986, the Hong Kong Futures Exchange (HKFE) introduced HSI futures contracts in response to the growing interest in the Hong Kong Stock market. Many now trade futures live, using charts, quotes, and historical data.

It is worth noting, however, futures investing also comes with risks, and this alternative does not guarantee higher yearly returns.

There are a couple of reasons why trading the Hang Seng 40 futures appeals:

• Low fees – Transaction costs are relatively low in comparison to buying and selling the constituent stocks. This is because the total value of high-capitalization stocks represented in each HSI futures contract is significant, whilst often only one commission is charged to enter or exit a position.
• Cost effective – Some argue that HSI futures represent a cost-effective means of trading, as you can trade contracts on margin. The margin used to carry an open position is often a tiny proportion of the contracted value.

Having said that, nifty trading is still required, so you should still look for a Hang Seng volatility chart for futures. You should also check contract specifications.

You can find details on Hang Seng shares futures on Bloomberg, including trading hours and definitions of terms.

ETFs

As with many indices, the Hang Seng underlies many exchange-traded funds (ETFs), that promise straightforward exposure to Hong Kong’s economy via a single trading vehicle. In many ways, these securities offer an uncomplicated alternative to American Depository Receipts (ADRs). Many of the top Hang Seng brokers offer ETFs.

Hang Seng H-Share Index ETF

The H-Share Index ETF tracks the Hang Seng China Enterprises Index (HSCEI). Many of the constituents are Chinese as the index tracks and measures the performance of Chinese equities. With companies such as Bloomberg compiling and publishing data on the Hang Seng, it looks as if more traders, from all over, will look to commit their funds.

iShares MSCI Hong Kong Index Fund ETF (EWH)

Note there are no funds traded in the US. However, a suitable alternative is the iShares MSCI Hong Kong Index Fund ETF (EWH). This tracks the MSCI Hong Kong Index. Again, this is a capitalization-weighted index, that seeks to encapsulate approximately 85% of the Hong Kong’s total market capitalization.

There is currently around $2 billion in total net assets under management, giving the ETF a decent expense ratio of around 0.48% with 50 holdings in its portfolio. However, financials dominate the list with 33%. The next 28% is formed of real estate, and 11% is weighted towards consumer cyclicals.

How To Start Trading At Hang Seng Brokers

Prepare

Monitoring the Hang Seng stock exchange live shouldn’t be the beginning of your day. If you want to assert a competitive edge, you need to be at your desk prepping before the opening bell rings. You need to be looking for potentially undervalued stocks.

Ideally, by the time the morning session opens, you will have analyzed historical charts, screened stocks and have nailed down a few that you will keep a close eye on as the day progresses.

Importantly, the Hang Seng of 50 components can be used to gauge investor sentiment and the overall economic health of Hong Kong and Asian markets. Performance has had its fair share of ups and downs, but it continues to draw in aspiring day traders from differing time zones, including the USA, Europe, and Asia.

Demo Account

Before you start day trading the Hang Seng with your hard earned capital, why not try a demo account first? Funded with simulated money, these allow you to develop strategies and get familiar with market conditions.

Many Heng Seng brokers, including AvaTrade, now offer this service free of charge, making it a fantastic way to test a potential broker too. Then when your confidence has built and you have mastered weekly, 5-year, 10-year, 20-year, and 30-year charts, you can upgrade to a real-time, live account.

News

One of the top tips for day trading on the Hang Seng is to monitor the latest news. Live quotes and prices will change in response to major news announcements. Daily reports are a fantastic way to stay up to date with market developments and maintain a future outlook. The top Hang Seng brokers will integrate this information into their resources catalog, meaning you don’t have to switch between several internet tabs and information sources.

Some of the top Hang Seng news resources include:

• Hang Seng Indexes Daily Bulletin
• Hang Seng Index (HSI) Constituent Stocks Performance
• Index Performance Summary
• Total Return Index Series Daily Bulletin
• Bloomberg News
• Yahoo Finance

The resources above can also provide annual reports, real-time price quotes, plus dividend yield history.

Education

Even experienced day traders never stop learning. The Hang Seng market can be unpredictable. So, seeking out resources to improve technical analysis, chart setups, and strategy, can all prove useful.

Some key Hang Seng resources worth considering are as follows:

• Videos & Tutorials – Learn everything from the basics of reading quarterly reviews to predicting movements in the red chip index, and how to spot a possible rally.
• Books & Ebooks – There are now books on every topic you can think of, from how to interpret the index 45 to the Hang Seng vs the Shanghai index and more.
• Forums & chatrooms – Engage with experienced traders, and have questions answered on everything from shorting gold ETFs, to forecasting prices.
• PDFs – Learn to analyze historical data from over the last 50 years. This could help you pick out telling patterns and prepare you for future price movement.

The switched on day trader utilizes a range of educational resources, which are often offered by leading Hang Seng brokers. That way when that next 52 week high comes around, they can call on in-depth knowledge to capitalize on its profit potential.

Automation

Once you have crafted an effective strategy for day trading the Hang Seng, you may want to consider automated trading. Once you have programmed your criteria, these algorithms and robots will enter and exit positions on your behalf.

This could allow you to enter far more trades than you ever could manually. Having said that, automated systems do still require maintenance and attention, as drops in performance can still occur.

Journal

Although often overlooked, day trading journals can be a powerful weapon to add to your investing arsenal. You simply need to keep a track of the following:

• Price
• Entry & exit position
• Purchase & sale date
• Position size
• Reason for making the trade

Input this data and information into an Excel spreadsheet or another tool, and you’ll be able to quickly analyze your recent performance. You may find identifying flaws in your strategy a far simpler process.

Final Word On Hang Seng Brokers

Day trading at Hang Seng brokers in real time offers a dynamic and potentially profitable means of capitalizing on intraday price movements. However, the volatility of the Hang Seng also brings with it considerable risks. This is all the more reason to select trusted Hang Seng brokers, have an effective strategy in place, plus a thirst to learn and adapt to the markets.

Use our list of the top brokers with access to the Hang Seng to get started.