How do I trade Asian, Chinese and Japanese stocks?

More and more investors are taking an interest in Asian shares, particularly Chinese and Japanese stocks. That's why, in this section of our site, we're going to tell you everything you need to know about these stocks, with a presentation of the major Asian and Chinese stocks, their characteristics and the information you need to know before buying or selling them.

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Investing in Asian, Chinese and Japanese stocks: in brief

  • Chinese and Asian stocks often benefit from strong economic growth with industrialisation, urbanisation and the rise of the middle class.
  • Volatility in Asian markets can be higher due to factors such as government policies, geopolitical tensions and currency fluctuations.
  • Asian stocks cover technology, finance, consumer goods and emerging industries such as renewable energy.
  • It is possible to buy certain Asian stocks online using a securities account or to trade them using CFDs.

Why buy and sell Asian and Chinese stocks?

It is not without reason that Asian and Chinese stocks have been attracting so many investors from all over the world in recent years. Here are some of the advantages of these stocks:

  • An increasingly important market: First of all, the Asian stock market, although not well known to many investors, is a large market. The Chinese domestic stocks market, for example, is now the second largest market in the world in terms of market capitalization, just after the United States.
  • An increasingly international market: The fact that Asian markets are opening up to foreign investors is leading to a change in the composition of certain financial services indices.
  • Strong diversification of securities: The Asian stock market also has the advantage of having an increasingly diversified range of securities listed on it. Many sectors of activity are thus represented and the opportunities t are therefore numerous.
  • Finally, the Asian stocks market remains low valued


How to invest in Asian and Chinese stocks?

To date, there are few funds that allow you to buy Asian and Chinese stocks through a portfolio of stocks. However, stocks that are listed on major Asian stock indices, such as the Japanese or Chinese benchmarks, are for the most part accessible from online trading platforms offered by CFD brokers.

In each article you will find information on how to buy and sell Chinese and Asian stocks, whether through a bank or an online broker.


How can I buy Chinese stocks?

Here are the different options for buying Chinese stocks:

1. Buying Chinese stocks listed abroad

  • Hong Kong: The Hong Kong Stock Exchange (HKEx) is the major stock exchange for Chinese companies. Many large Chinese companies are listed on the HKEx, including Alibaba, Tencent and Baidu.
  • New York: Many large Chinese companies are also listed on the New York Stock Exchange (NYSE) and Nasdaq.
  • London: The London Stock Exchange (LSE) also has a number of Chinese stocks listed.

2. Buying Chinese stocks via an investment fund

  • Index funds: There are index funds that track the major Chinese stock indices, such as the CSI 300 and the SSE Composite Index.
  • Active funds: There are also professionally managed active funds that invest in Chinese stocks.

3. Buying Chinese stocks via an online broker

  • Some online trading platforms allow you to buy Chinese stocks listed on mainland Chinese stock exchanges.


How can I trade Chinese and Asian stocks?

Trading Chinese and Asian stocks with CFDs (Contracts for Difference) is an alternative to buying stocks for cash.

CFDs allow you to profit from a rise or fall in the price of a stock without owning it.

Here are the advantages of trading Chinese and Asian stocks with CFDs:

  • No need to tie up large amounts of capital: You only need to tie up a fraction of the cost of the position.
  • Opportunity to profit from both upside and downside: You can trade both long and short.
  • Accelerated profits but also losses: Leverage amplifies your potential gains but also your losses, so be careful when using it.
  • Flexibility: You can trade in markets that are not accessible to retail investors.

Here are the disadvantages of trading Chinese and Asian stocks with CFDs:

  • High risk of loss: Leverage can also amplify your potential losses.
  • Cost: CFDs can be more expensive than spot stocks.
  • Complexity: CFDs are complex products and not suitable for all investors.

If you want to trade Chinese and Asian stocks with CFDs, it is important to understand the risks and specifics of this type of trading.


What Chinese stocks can I buy?

Here are the top 10 most-traded Chinese stocks in the world:

  • Alibaba Group Holding Limited (BABA)
  • Tencent Holdings Limited (TCEHY)
  • Meituan Dianping (MPNG)
  • China Mobile Limited (CHL)
  • Ping An Insurance Group of China (PNGAY)
  • China Construction Bank Corporation (CICHY)
  • Industrial and Commercial Bank of China Limited (ICBCY)
  • Bank of China Limited (BACHY)
  • PetroChina Company Limited (PTR)
  • China Railway Group Limited (CRHKY)

It is important to note that trading volume is not the only factor to consider when choosing a stock.

It is also important to consider the company's financial strength, growth prospects and risk profile.


How to analyse the price of major Asian and Chinese stocks?

As with investing in French, European or American stocks, a good investment in an Asian and Chinese stock depends above all on the ability to make a coherent analysis of it in order to anticipate its future movements as well as possible.

However, these analyses require a thorough knowledge of each stock and its issuing company. In order to help you in this sometimes complex task, we have therefore produced articles dedicated to major Asian stocks in which you will find all the data you need.

For example and for each security, you will of course find general stock market data such as the company's market capitalization, the number of shares on the market, the market and the stock exchange, the main stock market index or the sector of activity. We will also give you further information about these companies with detailed business data and sources of earnings, a presentation of their major competitors in their industry, examples of strategic partnerships they may have formed recently or their major strengths and weaknesses.

In each article, we will also detail the elements that you should take into account when conducting a fundamental analysis of these stocks with the publications and events that will have the most influence on its price.


Knowing the biggest Chinese and Asian stocks before trading them

By now you will no doubt have understood that the major difficulty in trading Chinese and Asian stocks is that you need to know a great deal about the companies that issue them. But unlike European or even US stocks, information from Chinese and Asian companies listed on the stock market is sometimes scarce and hard to find.

That's why we've devoted a section of our site to these stocks, enabling you to find all the information you need to analyse the biggest Asian and Chinese stocks at a glance.

Here you will find articles dedicated to each of the major stocks on the Asian market, containing useful and accurate information, including :

  • The data you need to take into account when carrying out a fundamental analysis of these stocks, i.e. the publications and events that are most likely to influence their growth and share price.
  • A detailed presentation of listed Chinese and Asian companies, with details of their activities and a breakdown of their sales according to the segments in which they operate or by geographical area.
  • An overview of the major competitors of these companies, to help you with your sectoral analysis of each stock.
  • A few examples of strategic partnerships set up by these companies to boost growth or improve profitability.
  • The advantages and disadvantages of each stock, in other words, the major strengths and weaknesses of each company listed on the Asian market. These factors will enable you to assess the company's overall ability to cope with future challenges and potential threats.
  • Naturally, for each of the major Chinese and Asian stocks we deal with, we will also give you the key figures and stock market data, such as total market capitalisation, number of shares outstanding on the market, the market and the major listing, the main stock market index and the business sector.
  • Finally, we provide detailed answers to the main questions that investors may have about these stocks, in the form of FAQs.

Finally, all the information you can find here on the pages dedicated to the major Asian and Chinese stocks will provide you with the basis for your analyses, with knowledge and information that is not exhaustive and will help you to carry them out. All that's left for you to do is to put it into practice by carrying out your own analysis of each stock before trading it.


Some information for investing in Asian and chinese stocks:

Let's end this article by presenting you some simple tips to trade Asian stocks in the most efficient way possible.

  • Firstly, you should always base your positions on a precise strategy by first carrying out a technical analysis of the chosen stock and a fundamental analysis. Once strong buy or sell signals have been obtained, you will be able to start trading with limited risk.
  • Also take the time to choose the stocks you wish to invest in and diversify your positions as much as possible by not betting everything on a single security or a single sector of activity.
  • Don't hesitate to use all the tools provided by your broker to find out whether an Asian stock is really interesting or not. In particular, systematically check the strength of a trend and its volatility.
  • Finally, don't forget to cut your losses or take your gains at the right time by placing stop and limit orders on each of your positions.


Which financial products should I use to invest in Asian and Chinese stocks?

Today, it is impossible for European investors to access the Chinese stock market directly. For the other Asian stock exchanges, some brokers give you access to them, including the Japanese stock exchange.

However, you can still buy Chinese stocks listed on the American or European stock exchanges, and there are many of them. This is done through certificates or contracts, which are certificates issued by banks representing foreign shares. However, check whether your stockbroker offers the shares you are interested in. To buy these Asian stocks for cash and add them to your stock market portfolio, you simply place a buy order for the number of shares you wish to acquire.

Another way to invest in more Chinese or Asian stocks is through derivatives such as CFDs, which do not require you to own the shares being traded. These are contracts that are backed by shares and track their performance on the stock market. There are many brokers offering this type of investment, which involves trading on the rise or fall in the price of an asset, with the gain or loss corresponding to the difference in price of the share between the time you take the position and the time you close it.

You can also make more diversified investments in these Chinese or Asian stocks through units of ETFs. These are exchange-traded funds that generally track a stock market index, in this case the Chinese or Japanese index, which holds a range of stocks and trades like stocks.
Finally, you can also look at certain mutual funds such as FCPs or UCITS that specialise in Chinese or Asian equities or that include a significant proportion of such equities. Here, a management company is responsible for the composition and management of the fund in order to optimise the return for investors.


How do you analyse price trends in Chinese and Asian stocks?

Of course, before you start speculating online on the major Asian and Chinese stocks, you should bear in mind that this investment, like any other financial investment, requires a sound knowledge of the market and the ability to carry out relevant and accurate analyses of each stock. This will enable you to obtain, in a concrete and serious way, upward or downward signals and therefore to know how best to position yourself.

Here, as with other stocks on the European or international markets, you are strongly advised to master both fundamental and technical analysis. Here we explain what they are and how they complement each other.

  • Fundamental analysis is based on the study of external factors likely to have a significant influence on the price of a stock. These are usually events and publications that will have a direct or indirect impact on the issuing company's ability to grow.  Some of these factors do not vary from one asset to another, such as published financial results, strategic development plans, partnerships or divestments, acquisitions or mergers. Other factors, however, may be specific to a particular company, depending on its sector of activity, its particular characteristics or the news affecting it. To carry out a coherent fundamental analysis of a Chinese or Asian stock, you therefore need to know what factors are influencing the economic health of the company in question.
  • The second type of analysis you need to master before investing in Asian and Chinese stocks is technical analysis. Unlike fundamental analysis, this analysis can be automated, since it is based on a mathematical model analysing the share price of the stock in question. For this technical analysis, it is possible to use and benefit from the charts offered by online brokers, who are among the most innovative and practical for this purpose. These charts can be customised, so you can choose the frequency that suits your investment strategy (short, medium or long term), and can display various indicators directly on the chart, including trend and volatility indicators. Of course, you will need to be able to interpret these different indicators to deduce buy or sell signals.

Using only one or other of these types of analysis is not advisable, as it would distort the signals obtained and their quality. Ideally, you should compare the signals you obtain through these analyses in order to confirm or refute them. It should also be remembered that these analyses do not give you a 100% guarantee of understanding and anticipating future movements in Chinese and Asian stocks, so you need to be aware of the risk involved in trading these stocks as you would other stocks on the market.