SmarTone Telecommunications Holdings (FRA: SMA) is a Hong Kong-based mobile service provider offering a variety of technology through its branches in Hong Kong and Macau. The company operates a number of subsidiaries based around different services, including Hong Kong’s first digital-only mobile operator, Birdie. SmarTone is also heavily involved in the emerging 5G market of Eastern Asia.
Though SmarTone Telecommunications does not currently trade on a U.S.-based exchange, retail investors located in the United States can invest in SmarTone through an international brokerage account. Learn more about the history of SmarTone and how to buy stocks listed on foreign stock exchanges with our guide.
How to Buy SmarTone Telecommunications Holdings (FRA: SMA) Stock
Buying a stock on a foreign exchange might seem like an intimidating process. However, the truth is that it’s now much easier to open an account with a broker that supports international exchange trading from the United States.
Though the specific steps that you’ll go through when you open a brokerage account will vary depending on the service provider you choose to work with, here are the basic steps that you can expect to go through when you purchase SMA — or any other internationally listed stock. Remember, economic growth is happening fast in this sector, and the public offering of these financial instruments could allow you to get in on the ground floor before that segment of the market erupts.
Step 1: Pick a brokerage.
The first step that you’ll take when investing in SMA (or any other type of stock) is to open a brokerage account. As a retail investor, you cannot buy and sell stocks directly. Instead, you’ll need to work through a broker, which is a financial institution authorized to buy and sell stocks on your behalf.
There are dozens of brokers accepting new account holders located both domestically and internationally. Here are a few things you might want to consider when you decide where you’d like to open your account.
- Access to international markets: SMA is accessible to investors in the U.S. through the Frankfurt Stock Exchange (FRA). However, not every broker offers access to exchanges beyond U.S.-based exchanges. Be sure that the broker you’re opening an account with supports FRA trading.
- Fees and commissions: Though many U.S.-based brokers have eliminated fees for domestic buy and sell orders, your broker may still charge a commission on international stock trades. Be sure to know the fee structure of your brokerage and when fees apply before opening an account, as these charges can quickly cut into any profits you see when trading.
- Platform functionality: Some brokers offer a wide range of professional charting and analysis tools while others focus on providing new investors with a straightforward, streamlined platform. You may want to watch a few platform tutorials before opening an account to ensure that you’re choosing a broker that caters to your trading skill level.
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Step 2: Decide how many shares you want.
After you’ve selected a broker and opened an account, you’ll need to decide how many shares you want to invest in. Because SMA currently trades as a penny stock, your broker will likely not allow you to purchase fractional shares. This means that the number of shares you’ll buy will need to be a whole number.
Set a budget and divide the current stock price of SMA by the amount of money you want to invest to determine how many shares you can buy. As is the case with any penny stock (which often constitute high-risk investments) you should never invest more money than you can comfortably afford to lose.
Step 3: Choose your order type.
After you’ve decided how many shares of stock you want to purchase, you can place a buy order through your broker. There are multiple types of buy orders, and the order type that you select will determine when your order is executed and the price that you’ll pay per share.
Let’s take a look at 2 of the most common types of stock orders that you’ll be likely to use as a beginner investor.
- Market order: A market order is a buy order that is executed at the current market price of a stock. A stock’s market price is the price that it is being sold for at the time that you place your order. For example, if the market price of SMA is trending at €0.50 per share, you can expect to pay around this price per share when you place a market order. If the price of the stock changes before your order is complete, you will pay the updated market rate for the rest of your order.
It is generally not recommended to use market orders when buying penny stocks. This is because these stocks tend to be less liquid, and the price can be highly volatile. Market orders are executed quickly but can be hard to predict in terms of price per share.
- Limit order: When you place a limit order, you tell your broker that you only want to purchase a set number of shares at or below a specific price. For example, if SMA is currently trading at a market price of €0.50 per share and you place a limit order to buy SMA at a limit price of €0.45 per share, your broker will not execute the order unless the price of SMA falls to €0.45 or lower.
Limit orders are less likely to be filled than market orders because specific conditions need to be met beforehand. However, placing a limit order can protect you against the volatile price changes commonly seen with penny stocks.
Market orders and limit orders represent the 2 most basic order types. Depending on your broker, you may have dozens of additional order types to choose from. You may want to do some research on when each type of order is most appropriate to use before you place your order to buy SMA.
Step 4: Execute your trade.
Double-check the details of your order, then submit your order to your broker. Your broker will then execute your order on your behalf. If the broker is able to execute the order according to your specifications, you’ll see the shares in your portfolio. If your broker cannot execute the order (because no one is selling their shares of SMA or because the limit price has not been reached) it may be closed at the end of the trading day or remain open for up to 90 days depending on your preferences.
SmarTone Telecommunications Holdings Stock History
Launched in 1992, SmarTone entered the market as the first telecommunications service provider to adhere to the Global System for Mobile Communications (GSM) in Hong Kong. Today, SmarTone offers a wide selection of services throughout Hong Kong and Macau, including voice, multimedia, SIM card and mobile network services. It is also focused on the development and deployment of 5G network services in Hong Kong.
In June of 2017, the company launched its subsidiary, Birdie Mobile, to target the millennial demographic. Birdie offers 2 products: a no-contract mobile plan and international SIM card services.
Though SMA’s share price has fallen drastically since its introduction, developing 5G offerings may provide opportunities to investors.
Introduced to the market in February 1999, SMA enjoyed a sharp rise in share prices until November 29, 1999, when the stock reached an all-time high value of €4.80. Since this time, the price of SMA has begun to fall consistently. However, new developments and upcoming 5G deployments may present new opportunities for investors and the possibility of reinvigorating the stock.
SmarTone Telecommunications Holdings Restrictions for Retail Investors
SMA’s common shares currently trade on the open market of the FRA. This means that there are no restrictions on buying and selling for U.S.-based investors so long as your broker is currently licensed and able to offer international penny stock trading capabilities. However, it’s important to remember that international stocks may not meet the strict criteria required by the SEC for U.S. listings.
Pros and Cons of SmarTone Telecommunications Holdings
|5G network covers the majority of areas in Hong Kong and continues to develop through more rural regions.
Current development of DSS “Dynamic Spectrum Sharing” is unique within the telecommunications sphere and may allow users to enjoy higher-quality 5G connections.
SIM card services aimed at millennials are compatible with more than 60 destinations.
|Share values for SMA have fallen by more than 46% in the last 3 years alone.
Continuous political turmoil in Hong Kong may negatively impact share prices of HK-based companies.
Requires an international brokerage account to buy and sell shares.
Investing in foreign-based companies can provide you with a unique way to diversify your portfolio. However, it’s important to remember that the quality of each company will vary and that due diligence resources may be more difficult to find in English. Wireless networks and other telecom assets tend to become preferred stocks because they are expected to stay the course and either outgrow their current value or become a acquisition fodder, making for a hefty payday for shareholders.
If you do decide to invest in international companies like SmarTone, be sure that these investments make up only a small percentage of your overall portfolio.
Frequently Asked Questions
Who owns SmarTone HK?
SmarTone is a subsidiary of Sun Hung Kai Properties Limited, which is listed on the Hong Kong stock exchange.
Who owns Birdie in Hong Kong?
Birdie Mobile is owned by SmarTone Telecommunications Holdings. The company targets its marketing to millennials by focusing on no-contract mobile and international SIM card services.
About Sarah Horvath
Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.