US tech stocks now in reach of Chinese investors with Tiger Brokers’ mobile app

The favourable track record of listed tech companies in the US inspired one Chinese entrepreneur to offer an app-based trading service so that Chinese-speaking investors could share in the benefits.

“We have 100 million stock investors in mainland China who are contributing to the businesses of Chinese technology firms, but they are unable to invest in these firms which are listed in the United States and profits have been taken by international investors,” Wu Tianhua, founder and chief executive of Tiger Brokers, told the South China Morning Post on the sidelines of the Rise 2017 conference in Hong Kong on Tuesday.

Wu in particular is referring to Chinese tech companies like Alibaba Group and Baidu Inc that have mostly listed on US bourses including Nasdaq and the New York Stock exchange (NYSE). He said Chinese people interact with these companies in their daily lives but couldn’t find ways to make money from them, a situation Tiger is striving to change.

Wu’s mobile app allows Chinese-speaking investors to trade US and Hong Kong stocks, and even A-shares via the stock connects between Hong Kong and mainland bourses, as long as the capital of the app user is located outside mainland China. That way, the funds won’t contravene the stricter overseas remittance policies that have been implemented by Chinese authorities.

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Unlike mainland bourses which were one of the most bearish markets globally in 2016, Wu said more than 53 per cent of Tiger users saw their investment balances rise after trading US stocks last year, compared with the 18.7 per cent slump in Shanghai’s benchmark Composite Index.

The majority of Tiger users are male, live in first-tier Chinese cities and work for technology and financial firms, so they have always been familiar with the technology, media, telecom (TMT) sectors. Some even own foreign assets because they work for companies that have had overseas initial public offerings, according to Wu.

Nearly 60 per cent of Tiger users were born after 1985. Besides mid-to-high net worth individuals, Tiger also targets Chinese students studying abroad and ethnic Chinese living outside the mainland.

With registered users exceeding 1 million, annual turnover on the Tiger platform reached 120 billion yuan (US$17.6 billion) at the end of 2016, up 30 times from the previous year. The company expects to see another 4 times year-on-year turnover jump by the end of this year, said Wu.

The three-year old Chinese online brokerage is also now under the spotlight after it attracted the attention of Jim Rogers by becoming the first Chinese financial technology start-up the US investment guru has ever put money into. Tiger Brokers said in March that it had raised 100 million yuan in a series B+ round led by China Growth Capital, but did not disclose how much Rogers agreed to invest.

As of July this year, Tiger Brokers has raised over 400 million yuan from its investors.