facebookLooking to buy tencent HKG 0700, but the lot size is 100 shares, would you recommend to buy TCEHY (OTC USA) instead? - Seedly

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melody

01 Sep 2020

βˆ™

Stocks

Looking to buy tencent HKG 0700, but the lot size is 100 shares, would you recommend to buy TCEHY (OTC USA) instead?

Whats the difference between these 2 stock even though they are basically TENCENT? tried to research and it seems like there are more fees fro TCEHY?

Discussion (4)

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Besides the risk of a ADR, suggest you take a look at demand and liquidity of the shares meaning number traded each day. You always need to be able to sell eventually to someone. Also US stocks are subjected to estate tax and also witholding tax if tencent gives dividends

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TCEHY is an ADR, or American Depository Receipt, listed in the US to raise funds from the US stock market. Before buying it, you should familiarize yourself with the general issues surrounding ADRs/ADSs including the fact that US government regulators will not be able to ensure that the Chinese company's books will be audited to US standards (recently implicated in the Luckin Coffee scandal), and also consider the geopolitical risk associated with buying a Chinese tech ADR in the US . There is a reason why many Chinese companies are doing secondary listings on the HKSE, because of the non-zero probability of being forced to de-list in the next few years. One specific risk for TCEHY is that the Trump administration has issued an executive order banning US business transactions with WeChat, and it is not clear how this will be implemented (though it looks unlikely to affect TCEHY's US listing for now, it is potentially a pre-cursor of further US action against Tencent down the line).

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