The success of online stock trading and brokerages has resulted in investing becoming more approachable for people who wouldn't otherwise have been familiar with the stock market. Interestingly, it is drawing overseas investors too.
What Draws Chinese Investors to US Stocks
Chinese investors are now being increasingly drawn to US stocks. It's not too hard to see why, and there are many reasons suggested for this:
- Through various industries, US exchanges are known to have some of the world's best companies, and some of the most famous brands – brands that have made a name for themselves such as Microsoft ($MSFT), Apple ($AAPL), Facebook ($FB), Starbucks ($SBUX), etc., and that also perform solidly in the stock market.
- These companies that are listed on the US exchanges are severely scrutinized in terms of regulatory compliance. This helps boost investor confidence, particularly for smaller investors. This is also true of some of the American companies listed as American Depository Receipts (ADRs) abroad.
- Chinese stocks have been experiencing massive volatility which has been a major discouragement for even native Chinese investors, particularly in real estate markets. The Chinese economy is also going through a slowdown, and the situation has been exacerbated by the Chinese currency depreciating. This has led Chinese investors to look beyond their country across various assets, be they stocks or real estate that are denominated in currencies that are more stable, such as the US dollar.
Online Trading and China's Increasing Internet Penetration
China's growing middle class is tech savvy, as a result of which it is more open to newer and more unconventional investing methods and investing overseas as well. The China Internet Network Information Center (CNNIC) reports that there were 731 million Internet users in the country as of December 2016. The Internet penetration rate was 53.2%, with mobile Internet users making up 95.1% of them. The annual growth rate is projected to exceed 10% for three years consecutively.
As a result, more and more people in China are open to trade in overseas markets, particularly in American markets thanks to online trading. More applications are now offered online and, with the increasing penetration and growth rate of Internet users, more Chinese are going to be open to overseas investing.
The technology behind online brokerages is one of the major factors behind this Chinese interest. TradeZero brings you this technology with advanced trading software to ensure effective online stock trading. Give us a call at +1 954-944-3885 or email firstname.lastname@example.org.
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