4 Stocks This Week (Daily Leverage Certificates) [15 November] – AIA; Hang Seng Index; HKEX; Ping An
Daily Leverage Certificates (DLCs) were launched on SGX in 2017 to offer investors a short-term trading instrument for gaining leveraged exposure to market movements (in both long and short positions). Since then, DLC issuer Societe Generale has continued to improve on the products offered.
Today, there are 75 DLCs that offer 3, 5 or 7 times leveraged exposure to indices as well as individual stocks listed on the Singapore Exchange (SGX) and the Hong Kong Exchange (HKEX).
Recently, InvestingNote and Societe Generale jointly-organised an active trading tournament involving DLCs. More than 2,000 traders competed, and showcased how various active trading strategies could be implemented using DLCs’ features of leverage, transparent pricing throughout the trading day, and the ability to conveniently take long and short positions.
The winners’ ceremony for the tournament will be held at SGX on 4 December 2019, which will include a presentation on the market outlook for 2020 by tournament winners.
For this instalment of 4 Stocks This Week, we’ll take a look at 4 counters available for trading with DLCs.
AIA Group Ltd (HKG: 1299)
The AIA Group is a leading pan-Asian life insurance company, with subsidiaries in 18 markets, including Hong Kong, Thailand, Singapore, Malaysia, Indonesia, China, Korea, and Australia.
As of 31 December 2018, the company serves 33 million individual policyholders and 16 million participating members of group insurance schemes, with a total sum assured value of US$1.58 trillion.
This year, AIA celebrates its 100-year anniversary. The company has stated that it will continue to remain focused on serving the Asia-Pacific region, where the middle-class population is expected to more than double by 2025. With the relatively low levels of private insurance penetration and social welfare coverage, AIA expects the growth opportunities and need for their services to remain robust.
Listed on the Hong Kong Exchange, AIA Group closed at HKD $77.00 this week.
Hang Seng Index
Launched in November 1969, the Hang Seng Index (HS) is the most popular index in Hong Kong and is often the main point of reference for how well the Hong Kong stock market is performing.
HSI comprises of 50 constituents, grouped into four main segments: Finance (e.g. HSBC, ICBC, AIA, Bank of China); Utilities (e.g. CLP Holdings, HK & China Gas); Properties (e.g. Wharf Holdings, Henderson Land) and Commerce & Industry (e.g. CKH Holdings, Swire Pacific A, Tencent). Combined, the market value of HSI constituent stocks cover about 60% of the total market value in Hong Kong.
Despite the deteriorating protest situation in Hong Kong, the HSI inched up 2.97 points to 26,326.66 by the close of this week, with most stocks closing flat.
Hong Kong Exchanges And Clearing Limited (HKG: 0388)
As a leading financial market operator in the world, the Hong Kong Exchange (HKEX) sits at the intersection of Chinese and international capital flows. HKEX also runs the London Metal Exchange in the United Kingdom
As of 31 December, there are 2,315 companies listed on HKEX, with a total market capitalisation of HKD $29.9 trillion. Some of the leading companies on HKEX by market cap include Microsoft, Tencent, Intel, Cisco, Ping An, and AIA.
HKEX closed this week at HKD $240.80, giving it a market cap of HKD $303.697 billion.
Ping An Insurance Group (HKG: 2318)
The Shenzhen-headquartered Ping An Insurance Group is one of the top insurance groups in the world and China’s largest.
Ping An has launched FinTech subsidiaries like OneConnect (which is in the midst of its own listing in the United States), Lu Global (a wealth management platform that is available to accredited-investors in Singapore) and Lufax Holding (a financial assets and P2P-lending marketplace).
Over the next decade, the company has committed to investing 1% of its revenues into research and development in areas like AI, Blockchain and Cloud Computing.
Ping An closed at HKD $91.05 this week, giving it a market cap of HKD $1.739 trillion.
Adding DLCs To Your Investment Toolkit
With DLCs, you can gain leveraged exposure to intraday price movements of the above 4 counters, and more. Note that only investors that are Specified Investment Product (SIP) qualified are allowed to trade DLCs.
This means those who trade the product should be fully aware of the risks and have the required knowledge to do so responsibly. If you want to start trading the DLCs, make sure you understand what you are trading and consult your broker if you are not sure.