SINGAPORE investors can now directly invest in three Hong Kong blue-chip stocks – Ping An Insurance, Meituan and Xiaomi – via newly launched Singapore Depository Receipts (SDRs). This broadens the Singapore Exchange’s (SGX) thematic investment opportunities in artificial intelligence (AI), electric vehicles (EV), e-commerce and financials.
SGX launched its second batch of Hong Kong SDRs on Wednesday (Mar 5) in partnership with Phillip Securities. The new offerings include Xiaomi and Meituan in AI and EV, as well as Ping An in financials, targeting “yield-seeking investors”.
SDRs are unsponsored depository receipts that provide holders with a beneficial interest in an underlying security. Each SDR can be converted into the underlying security through an issuance and cancellation process on a one-to-one basis.
Serene Cai, head of securities trading at SGX Group, highlighted the growing appeal of Hong Kong SDRs following their positive reception since launching in October 2024.
“Growing investor adoption from local and regional markets like Malaysia and (South) Korea confirms the value of SDRs, especially for high-investment stocks like BYD and Tencent,” she told The Business Times.
She noted that about 70 per cent of retail SDR trades are smaller than Hong Kong’s board lot, highlighting the “demand for more accessible investment sizes”.
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High demand
Last October, SGX expanded its SDR offerings with five Hong Kong mega-cap listcos: Alibaba, Tencent, BYD, HSBC and Bank of China.
Since then, SDR daily turnover has surged eightfold to S$4 million in February 2025, with assets under management growing fivefold to over S$30 million, with more than half held by retail investors.
Active trading was observed during key market movements, particularly in the early morning and late afternoon around 4 to 5 pm. SGX noted that most SDR trades are smaller than onshore tickets, indicating demand for the flexibility that SDRs offer.
The China tech rally further boosted SDR demand, with the most traded Thai and Hong Kong SDRs in 2025 year to date being Delta Electronics, with a securities daily average value (SDAV) of S$150,000; and Tencent and BYD, both with more than S$1 million SDAV.
Alibaba emerged as the top performing HK SDR, returning over 30 per cent since its launch.
Eight HK SDRs now represent more than 40 per cent of the Hang Seng Index spanning financials, technology and consumer sectors. Similarly, eight Thai SDRs cover over 40 per cent of the Stock Exchange of Thailand’s SET50 index across eight sectors.
SGX plans to include more Thai and Hong Kong SDRs by mid-2025.
Boosting market access
Growing interest and volatility in Hong Kong stocks have fuelled SDR liquidity, said SGX. By offering exposure at lower entry costs – starting at 2 per cent of the underlying stock value – SDRs provide greater portfolio flexibility. Minimum investments range from S$400 to S$600, far lower than the few thousand dollars typically required for direct Hong Kong stock purchases.
Each SDR represents a fraction of a Hong Kong-listed stock. Xiaomi and Ping An Insurance SDRs have a 2:1 ratio, meaning each SDR represents half a share, while Meituan SDRs have a 5:1 ratio, representing one-fifth of a share. For example, an S$585 investment in Meituan SDRs equates to Hong Kong-listed shares worth S$2,924.
A key advantage of SDRs is their ability to simplify access to overseas-listed companies. Since they trade in Singapore dollars on SGX, SDRs eliminate the complexities of cross-border trading, such as foreign exchange and settlement risks.
Beyond accessibility, Hong Kong SDRs offer additional benefits. Investors can trade in Singapore dollars on SGX during local market hours, execute trades through local brokers, and receive dividends in Singapore dollars. They can also leverage pre-market trading opportunities before the Hong Kong market opens, overlapping with US pre-market hours.
Additionally, SDRs complement SGX’s existing suite of structured warrants, daily leveraged certificates and exchange-traded funds tied to Hong Kong and China assets. This enables investors to engage in pair trading across these instruments.
