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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

Asiaweek Agenda Personal Finance

BUY, SELL -- AND CLICK

Global investing via the World Wide Web


WHILE FINANCIAL MARKETS MAY have gone global, you may find that your local banker scratches his head over foreign currencies and the nearest stockbroker is an airplane trip away. Well, if you have a computer and a phone line, you can set up an Internet investment account with Charles Schwab & Co. The U.S.-based securities firm, which pioneered discount brokerage in America and has served Asia since 1980, is leading the way in on-line investing in the region.

Four months after opening a Hong Kong office in April, Schwab pioneered on-line trading in mutual funds in Asia, through its Internet site (http://www.schwab-worldwide.com ). Two unit-trust giants, Fidelity Investments and Jardine Fleming, whose Web sites (http://www.fidelity.com.hk and http://www.jfleming.com ) offer information but not transactions, are considering on-line trading.

To get started on-line, go off-line first: ask Schwab for an old-fashioned application form. Fill it out and send it back with your initial investment ($10,000 minimum), payable by check or wire transfer. Once the account is established (in a day or two), you are issued a secret number to log onto your Internet account at the Schwab Web site. Then you can point and click to buy and sell mutual funds, check fund performance and even dabble in U.S. stocks and bonds.

Schwab has numbers to call if investors feel the need to hear a human voice. "People like the traditional account procedure," says Schwab's Hong Kong general manager Shaun Pratley. "It gives them a sense of security that we're a real company with real people." Still, Web trading is spreading; Pratley says half of Schwab's mutual-fund transactions take place on line.

For those worried about the security of Internet trading, protection comes in three ways. First, no money changes hands on line; payments are only by check or telegraphic transfer. Investors are insured against fraud or bankruptcy (but not market fluctuations) up to $100 million. And third, to ensure the confidentiality of the cyber orders, an encryption technology called Secure Socket Layer shields communications between Schwab and its clients. You can tell if you have a secure link when the lower left corner of your Web browser shows a small unbroken-key icon (for Netscape Navigator) or a lock (for Microsoft Internet Explorer).

The funds available to an investor depend on where he lives. Hong Kong residents have the most choices: some 150 funds from 14 major companies. A few fund groups like Scudder and Goldman Sachs may not be traded outside Hong Kong, but that leaves another 120 funds open to many other Asian countries. If you sell fund shares but can't decide whether to take payment or reinvest the proceeds in other trusts, the cash waits in a money-market fund.

Like global capital, the Internet pays little heed to national borders, but local laws on what citizens can invest in still apply. So do tax regulations. And cyber-investing won't prevent losses due to bad decisions. So let's be careful out there -- on line or not.

-- By Jonathan Sprague and Andrea Hamilton / Hong Kong


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