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The Tiger Is Rising

After investors learn to trade on beginner trading platforms, many are moving into more complex investment products on their platform, says Tiger Brokers.

5 October 2021

A growing number of Kiwis are moving on from simple share transactions, into the exciting world of margin, options, or futures trading accounts, says Albert Flint, head of Business Development at Tiger Brokers.

“Many retail brokers, like Sharesies, focus on a limited low-risk offering for everyday investors and they’re a great place to start, but such an offering can only go so far,” he says.

“When you’ve learnt all about vanilla securities and you want to see what else is out there, we can give you a wider range of products at a super-competitive price.”

This includes investing directly in over-the-counter (OTC) or derivative products.

Flint says Tiger Brokers is a purely online broker that offers Kiwis a cost-effective platform for entry-level and experienced investors alike.

There are many benefits of the platform, says Flint.

“We have more choices, with lower fees, making it a compelling proposition for sophisticated retail investors.

“If you want to trade in markets that other platforms don’t reach, like China, Hong Kong and Singapore, we’re your go-to place.”

He says among Kiwis, popular products are shares in Australia and the US, margin, options, or futures trading accounts.

They’re an ideal way to get into more complex investment products once you understand them, he says.

Massive buying power

Tiger Brokers currently charges zero brokerage fees for US securities for the lifetime of your account, making it by far the lowest-priced local trading platform.

On Hong Kong and China stocks, the commission is below 0.05 per cent, and it’s below 0.15 per cent for Singapore and Australian stocks. Financing rates on margin accounts start from 3 per cent.

Flint says the low fees are possible because Tiger Brokers in New Zealand is owned by the China-based parent company Tiger Brokers, a publicly listed fintech business with huge global reach.

Leveraging the buying power of the international Tiger Brokers organisation means New Zealand clients can get very low-cost brokerage into the five major markets where it operates.

“Tiger started in mainland China at a time when traditional banking and fintech services were reinventing themselves,” Flint explains.

“It created a way for Chinese retail investors – both in China and ex-pats overseas – to buy global shares.

“There are only limited ways to allow capital to flow out of China, so there was strong demand for access to international markets.”

Tiger Brokers now handles around 70 per cent of the Chinese market for US securities.

Asian opportunities

US shares will always be popular and well understood here, but New Zealand’s proximity and strong trading relationship with Asia creates new and interesting opportunities for investment, says Flint.

The Hong Kong Stock Exchange is Asia’s largest exchange by market capitalisation and has performed extremely well over the last year, while the Singapore Exchange is known for its tax advantages, stability, and strong dividends.

China has its own selling points: a giant pool of tech expertise, a population of 1.4 billion, and post-Covid first-quarter 2021 economic growth of 18.3 per cent.

Every Kiwi has benefited from trading with China, from the Chinese-made products we buy to the money that’s flowed into our economy, says Flint.

Considering how much we rely on the success of China, Hong Kong, and Singapore, he says we should all think about investing in the future of Asian markets.

“The world has changed in last 20 years. A lot of the growth is in the East.

“There’s been exponential levels of wealth pouring into Hong Kong and Shenzhen, and systems allow Hong Kong and the mainland to interact and transact, which has led to the huge growth of fintech and the financialisation of those markets.

“This is likely to continue,” he says. “We’re no longer looking at the ‘$2 Shop’ stereotype of Chinese business – this is about huge conglomerates with global revenue streams.”

Plans to expand

Tiger Brokers New Zealand is a separate unit from its global parent company, and expanding rapidly. For now, retail investors are the main clients for the business, but institutional investors are beginning to take an interest in its market-leading low fees.

Flint says the Tiger team would also like to move into wealth management and investment banking, while continuing to offer more choices than other providers on an easy-to-use platform.

“It used to be painful to be a retail investor in New Zealand – with such small numbers, there’s been a long-standing indifference from our markets,” says Flint.

“Now Kiwis retail investors don’t need to endure the expensive and long-standing barriers to entry to trade from our little corner of the world. When you want to transact globally, and you want to do so on the cheapest price point, think Tiger.”

Editor's note: Derivatives are for experienced investors.

Informed Investor's content comes from sources that Informed Investor magazine considers accurate, but we do not guarantee its accuracy. Charts in Informed Investor are visually indicative, not exact. The content of Informed Investor is intended as general information only, and you use it at your own risk.

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