NZ investors buy into Chinese e-commerce
Kiwis who use New Zealand-based digital share-trading platform Hatch can now buy shares in Chinese e-commerce giant Alibaba.
Hatch is an online service owned by KiwiSaver provider Kiwi Wealth. It lets self-directed investors build themselves portfolios of shares listed on the New York and Nasdaq stock exchanges.
But while Hatch gave investors the choice of more than 2700 shares, and 450 exchange-traded funds, some of the biggest names in international business, such as Alibaba Group Holding, weren’t available.
Kiwis are increasingly buying goods online through Alibaba’s AliExpress.com website.
‘‘A number of people had been asking us about Alibaba,’’ Hatch general manager Kristen Lunman said.
But that has now changed, she said, with Hatch’s move to allow investors in New Zealand to buy into the likes of Alibaba through a form of investment called American depositary receipts, or ADRs.
ADRs own the shares of a single company. They are publicly traded like shares, so investors can buy and sell them, with the price determined by supply and demand.
They are a big deal on United States sharemarkets, with banks, insurers, infrastructure builders, pharmaceutical and other kinds of companies setting up ADRs to get the financial backing of US investors.
‘‘A number of people had been asking us about Alibaba.’’
Kristen Lunman, above, of Hatch
‘‘Through ADRs, we’re now giving Kiwis the opportunity to invest in publicly traded companies from 35 countries including China, Japan, Germany and the United Kingdom,’’ Lunman said.
‘‘Kiwi investors will now be able to access even more internationally recognised companies such as Alibaba, Weibo, Nokia and Unilever.
‘‘This means they can further diversify their portfolios by investing in global companies through the US sharemarkets.’’
ADRs are created when US depository banks buy shares in a foreign company listed on a foreign sharemarket, and repackage them to list on the US sharemarkets.
There are more than 250 companies with ADRs on the US markets that Hatch investors can buy.
These include UK pharmaceutical giant AstraZeneca, Dutch bank ING, Chilean banks, and Chinese internet and artificial intelligence technology company Baidu.
Other big names on the list include Toyota, Smith & Nephew, BHP Billiton, Credit Suisse, Diageo, and Orix.
Hatch launched in September last year and is still small, having just passed the milestone of $6.5 million in shares bought by do-it-yourself investors.
It has received high levels of investor interest in technology companies, big-name e-commerce enterprises such as Amazon.com, and medicinal cannabis companies.
‘‘We’re really pleased with Hatch’s growth trajectory,’’ Lunman said.
‘‘It shows there’s a real demand from Kiwis who want to self-direct their investments and access US listed companies and exchangetraded funds, without the hassle and costs of the traditional brokerage model.’’