Apr 01, 2021 (China Knowledge) - Given that China’s financial markets are not tradable directly outside the country but opened merely to foreign financial institutions and through Hong Kong Stock Connect channel its active and highly liquid markets are very alluring to any foreign retail investors outside China.
Averaging USD 150 bln daily trading on both Shanghai and Shenzhen Stock Exchange, China’s market is just the opposite of most matured equity markets. As of end Feb, some 180 million local citizens have registered stock trading accounts - that versus 50 million American households. In terms of liquidity, although the U.S total stock market capitalization is 3 times of China, the daily trading averaged USD 300 billion, only double of the Chinese market.
By ratio between retail and institutional trades, China’s three-quarters of stock trading are non-institution or funds related. On the opposite the U.S. is mainly traded by institution and funds, but this also seems to change; especially from last year, retail investors are creeping into large share of the trading and registered a robust growth to exceed the 1-quarter mark. In Europe, in part due to pandemic lockdown many people have turned active day traders. This is clear evident from reported increasing fees collected from online stockbrokers.
Therefore, many foreigners are enthused by the kind of trading platforms that such active retail investors trade their stock markets. One obvious trait can be easily identified is to learn about major providers of mobile trading apps. With over 1 billion mobile phone users finding the most popular and active trading app is a reliable answer.
Out of 129 licensed stockers, about close to 100, provide up-to-standard full-suite apps that are very well-equipped with trading tools, content and automated features to serve such a large lucrative market. To evaluate each of these app, China Knowledge’s research teams adopted a string of metrics to meticulously evaluate each stockbroker’s single or multiple mobile trading apps. To offer foreign readers an easy-to-grasp of these apps, a ranking of Top 10 stockbrokers are designed. Base on four categories: ‘User Experience’, ‘User Interface’, ‘Content Richness’, ‘Product Offer’ and a final 10% allocation weighted on ‘Monthly Active User’ (figures provided by Qianfan Analysys), China Knowledge has compiled a list of highest scorers.
Under each main category the factors are detailed as follow:
User Experience includes ‘whether users require to sign in’, ‘service response time’, ‘AI customer service’, ‘ transaction convenience’ and ‘user Interface’.
Content Richness factors in the wealth of research content by variety of investment themes, content contributors, ESG and quant tools availability.
Product Offers count the number of financial products put up for users to trade. Besides the common A-shares and mutual funds, the availability to trade Hong Kong shares and permitted derivatives are plus points for this award.
The final scoring for the TOP 10 Mobile Trading App are from Huatai Securities, Guotai Junan Securities, Ping An Securities, Haitong Securities, CMS Securities, China Securities, CITIC Securities, Zhongtai Securities, Shenwan Hongyuan Securities and Everbright Securities.
Although foreign residents in China, over a million of them, with work and residence permit are legible to open a trading account in local financial products (more than just stocks and mutual funds) all the apps only operable using Chinese language. With growing interests from this market, and gradual opening up to foreigners outside of China English language app should be made available sooner than expected.
If China’s joining of World Trade Organization (WTO) in 2001 to become the world’s largest trading nation today be used as a yardstick, its financial market could be the next to top the list in a decade or so – not a far fetch from current second place in world.
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