Practical Details on Stock Pledge Loans at HSBC Hong Kong

Related Materials

• Previous presentation: How Interest Rates Work in Capital Markets, rev 1.0
• Next presentation: The World's Best U.S. Nasdaq 100 Index Investments

Document Text

Teacher James

Hello,

After watching 00508, I was deeply encouraged and learned that HSBC Hong Kong can also provide stock pledge loans. I went to Hong Kong to open an account on March 27, 2025.

1. Regarding HSBC account opening and stock account transfer, the relevant information currently known is as follows:

2. To open a Wealth Portfolio Lending account, you need to be an HSBC Premier customer. The account requires HKD 1 million. If the balance is below the requirement, HKD 380 will be deducted each month. If you open only an HSBC One account, this service is not available.

3. When opening the account, the relationship manager specifically mentioned that HSBC's stock trading and securities fees are higher than those of other local Hong Kong brokers. HSBC Hong Kong's website offers a Trade25 promotion, available to people aged 18 to 25, and people aged 35 or below can join on or before December 31, 2025. It costs HKD 25 per month, and trades in Hong Kong, U.S., and A shares within a HKD 250,000 limit have zero fees.

4. If you need to invest in US stocks, you need to use your passport when opening an account.

5. There is very little information on transferring accounts to HSBC Hong Kong stocks. You need to go to the branch to fill out a form to transfer the account. The account manager is only familiar with the Hong Kong Central Trading System CCASS account transfer operation and is not familiar with the international account transfer method DTC.

6. Transferring Hong Kong and U.S. stocks through CCASS at local Hong Kong brokers is also expensive. For example, uSMART charges at least HKD 600 per stock for transfers out, and at least US$100 per stock for U.S. stocks.

7. The stock borrowing interest rate is based on the loan amount: one-month Hong Kong interbank offered rate (HIBOR) +1.2%

The above is what I currently know, for reference. I am still not very clear about point 6, specifically how assets and borrowing interest are calculated, and need to research and learn more.

2. Current situation and problems:

Current status:

Since I have not done systematic planning before, my situation is as follows, in the 00508 video

Account assets, the total number of various accounts is 1.114 million

Speaking of Han Xin Dian Bing and Hong Kong HSBC Excellent Stock Pledge Loan, I now want to collect all the account funds and try to apply for a loan limit to borrow a little money to learn from the experience.

Account assets across all accounts total 1.114 million.

Question:

1. Since HSBC Hong Kong Premier banking customers are required to have HKD 1 million within 6 months to maintain the account level, if not met, HKD 380 will be deducted per month in the 7th month.

Please ask Mr. James for guidance above, thank you.

2. Since the U.S. stock market is currently down, if you sell funds from accounts in the United States, Macau, and Mainland China, you will realize a loss of about HK$100,000. I don’t know what to do now.

3. The current funds from mainland China are planned to be used as emergency reserves.

4. At present, I want to accumulate funds in this HSBC Hong Kong account. I will gradually deposit my working salary into this account in the future, and borrow money from this account to withdraw my living expenses. What is the opinion of the unknown teacher?

Please ask Mr. James for guidance above, thank you.

Related links:

Wealth Portfolio Lending https://www.hsbc.com.hk/zh-cn/wealth-financing/products/wealth-portfolio-lending/

HSBC trade 25 https://www.hsbc.com.hk/zh-cn/investments/products/stocks/trade25/

Hong Kong Yingli Securities https://www.usmart.hk/zh-hk

Teacher's reply

So my suggestion is to act quickly. If transferring the stocks is troublesome, you can simply sell the stocks, transfer the cash in directly, and then buy again through HSBC.

Do what needs to be done quickly. Do not hesitate over a few hundred Hong Kong dollars, and do not worry about maintaining HKD 1 million just to avoid fees. In the future, our assets will certainly be far above USD 1 million, even reaching hundreds of millions of dollars. Do not worry about short-term market fluctuations. If short-term fluctuations cause you to pay some account fees, that is only short term. Do not delay important long-term planning because of short-term issues.

So my suggestion is to do it quickly, and if it is troublesome for you to transfer stocks, then you can simply sell the stocks and transfer them in cash directly, and then transfer them again from HSBC.

Even if you make a loss by selling at the market price, if you immediately buy at the market price, you may actually be able to buy it at a lower price.

Buying the stocks again may be simpler and more cost-effective. Because when we buy stocks, we buy once and do not trade in and out again, so there should be no future transaction fees. There is no need to care too much about a one-time transaction fee.

The interest rate is HIBOR + 1.2%, and now HIBOR 3.72% + 1.2%=4.92%, which is still a very reasonable interest rate.

Even if you make a loss by selling at the market price, if you immediately buy at the market price, you may actually be able to buy it at a lower price.

No one knows at all, so you just sell it at the market price immediately and buy it at the market price immediately.

Of course pledge borrowing is possible, but remember to follow the rule of borrowing at most 2% per year. The asset allocation must also be stable. In addition to our recommended 433 allocation, you can be more conservative and hold more cash. For example, a 424 allocation can work, or the more conservative 505: 50% QQQ and 50% MONEY MARKET. You must do smart rebalancing every year. If the market falls, use cash to buy the 2x leveraged fund.

Even conservative allocations such as 505 can produce good asset growth. The first priority in investing is stability; returns come after that.

The above sharing is for your reference, it’s great, keep up the good work!