- HSBC is roaring back after the pandemic with first half-year profits in 2021 doubling the 2020 figures, even after setting aside amounts for bad loans during the pandemic.
- Traditional banks are facing competition from FinTechs due to the popularity of mobile payments, merchant mobile apps, Buy Now Pay Later services, and from cryptocurrencies.
HSBC (NYSE: HSBC) is a British multinational and one of the world’s largest banking and financial services organisations. It is the second-largest bank in Europe and has more than 40 million customers worldwide, spanning 64 countries and territories. HSBC is headquartered in London, United Kingdom.
This is a complete guide to buying shares in HSBC from Australia.
New to overseas trading? You might be interested in our guide to buying US stock.
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The company was founded in 1865 in Hong Kong, was reorganised as HSBC Holdings PLC in the UK in 1991, at which time it was listed on the London Stock Exchange (LON: HSBA). It is also listed in the Hong Kong (HKG: 0005), New York (NYSE: HSBC) and Bermuda stock exchanges.
HSBC serves individuals as well as some of the world's largest companies, governments and international organisations. Its products and services are offered through three businesses: Wealth and Personal Banking, Commercial Banking, and Global Banking and Markets.
HSBC has a matrix structure with locally incorporated subsidiaries and seven principal subsidiaries that take responsibility for the oversight of group companies in their region. In 2019, approximately half of all the company's income originated in the Asian region.
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Step 1: Select a broker
There are many online brokers that offer different options. When choosing a broker, there are some important features you should look out for. These are some of the key features to look for when choosing a broker.
Many US share trading platforms offer this option. It is possible to save money on share trading by not paying commissions.
Access to where HSBC is listed
As an international bank, HSBC is listed in Hong Kong, New York and London. To buy its shares, you need to select a broker with access to at least one of these markets. In Australia, the most accessible of these is New York.
Fractional share investment
Fractional share investment means that you can buy a portion of a share, rather than the entire thing.
Simple-to-use trading platform
It doesn't have to be difficult to trade shares. Keep an eye out for a platform that is simple to use.
Research and reporting
You should look for platforms offering detailed research on items such as company overview, price history and recommendations, and even price forecasts.
Step 2: Fund your trading account
Next, deposit funds into your account. If you just opened a trading account, it might take some time before the funds clear so that you can trade.
Step 3: Decide how much to invest
If you can invest with fractional shares, you can invest exactly the amount you want to. Therefore, you can start with a small investment and take on less risk.
Step 4: Decide whether to invest in an ETF or buy individual shares
An ETF is made up of shares in many different companies. Therefore, you can either buy a share in the company or invest in them via an ETF. These funds are less appealing to active traders because they have less control over the money's destination, but are typically considered less of a risk.
ETFs with HSBC shares include Pacer Trendpilot International ETF and Avantis International Equity ETF.
Step 5: Customise your order
You can customise what you buy and the price you pay. There are many order types. These are the main order types.
Order to purchase/sell shares instantly. This ensures that the order is executed immediately, but does not guarantee the price.
Execution-only orders for buy limit orders are executed at the price quoted or less. You may wish to buy HSBC shares at a price of US $200. You can submit a limit order for this amount. It will only be executed if HSBC shares fall to US $200 or less.
This type of order allows you to sell your shares at a certain price or higher. Let's suppose you want to sell HSBC shares at US $250 per share. Your stop limit order is executed when the shares reach this price.
You decide the price at which it is worth selling your shares. Let's take, for instance, US $250 as your price at which to sell HSBC shares. Your stop loss order will be executed if the price falls to that level and your shares will be sold at the next available market price.
Step 6: Place your order
After you've chosen a broker and funded your account according to the amount you want to invest, and determined how you will invest your HSBC shares based upon the order type, you can place your order. This is usually done with a click of a button.
Step 7: Monitor your investment
When you are investing in shares of a company, with a speculative motive or to hold them over the long term, you need to keep track of share price movements as well as the company’s performance.
Track HSBC’s performance
Keep an eye on how HSBC performs and its share price movements. HSBC is a dividend-paying share. You also want to keep track of company financial fundamentals to have confidence that it performs to your expectations.
Factors influencing the global banking sector
Increases in local and global interest rates will also play a role in banking revenues, so watch out for those announcements as well. Since the Asian region accounts for over half of HSBC’s revenues, you may want to keep an eye on how economies across Asia rally after the COVID-19 lockdowns.
HSBC is one of the UK's big four banks. Others are Barclays, Lloyds Banking Group and NatWest Group. International competitors include Citibank, UBS, Bank of America, Standard Chartered, American Express, Deutsche Bank, Goldman Sachs, Wells Fargo and JP Morgan Chase.
Global banks are facing competition from FinTechs. Banks like HSBC are increasingly experiencing drops in revenue because of payment displacement and loss of interchange revenue due to a number of trends. These include the consumers' increasing use of mobile payments, merchant mobile apps, Buy Now Pay Later services and use of cryptocurrencies.
Disclaimer: We put our customer’s needs first. The views expressed in this article are those of the writer’s alone and do not constitute financial advice. Advertisers cannot influence editorial content. However, Finty and/or the writer may have a financial interest in the companies mentioned. Finty is committed to providing factual, honest, and accurate information that is compliant with governing laws and regulations. Do your own due diligence and seek professional advice before deciding to invest in one of the products mentioned. For more information, see Finty’s editorial guidelines and terms and conditions.