Trading on the ASX FROM NZ

[Charlie]

Hi all.
I have been trading on the ASXthrough the ASB NZ platform as I live in NZ
I see they take almost 4% in exchange rate from buy to sell + av $30 commission each way .
so realistically need to make 5% profit on a share to break even .....!

How you guys do it ?
I am not eligible to open a Auzz bank account without living in Auz correct? And if i did how would I trade on- line .

A really novice question , thanks for you guidance .
do Sharies do it differently ?

[nztx]

Sharesies allow Oz trading - 1/2 of a percent no minimum / minimum commission/brokerage for buys / sells

May be some ASX companies they don't include on their tradeable lists (eg options) but they have many / most listed Aust Ords of significance from what I have observed.

Larger orders possibly qualify for lower commission rate.

Sharesies holdings are held in Sharesies Nominee Ltd nominee name on behalf, but can be transferred into your own name I guess

They collect dividends on your behalf/ pay tax for you & you can transfer between NZD AU or USD balances in your account wallet (a small exchange margin is charged & you top up wallet from NZ account or credit card)

No need for your own Aussie bank account

[JBmurc]

I started off with E*Trade that was taken over by ANZ invest .. they include an AUD call account So does ASB sect....If i want to transfer funds I use ASB private bankers which give me a great exchange rate as long as I shift a good amount of capital pa . but one could use any of the well known currency exchanges that beat the banks by many %

You never want to have to convert AUD to NZD on every trade that would cost thousands in extra costs to a trader

[Charlie]

Thanks both, very helpful.
yep , not good when they take currency conversion on every trade .
not happy with that.

[DarkHorse]

Yes ASB Securities can open an AUD account, so dividends and proceeds from sale of Australian shares can be reinvested without conversion.
It's very convenient to use in the same way as other accounts for online banking and cash management acccount for sales or purchases of shares.

Initial investment is a different story - they do take a decent cut on the exchange conversion, although it seems to be around 1-2% rather than 4%.
Some dividend paying ASX cos now also require Australian bank accounts and no longer send dividend cheques.

[Carpenterjoe]

Don't be fooled by the lower brokerage in Australia, they have T+2. This means your funds are not released back to you until 2 trading days have passed. Direct broking or Jarden allow you to keep funds in AUD to avoid excessive ticket clipping, last time I worked it out, they kept an extra 1% compared to my Wise account.

[DarkHorse]

I'm not upwith Wise, would be interested to know something about it.

[nztx]

AUD available within a few minutes, if not instantly with Sharesies - to exchange to other currencies or for further buy orders

[moimoi]

Yes ASB Securities can open an AUD account, so dividends and proceeds from sale of Australian shares can be reinvested without conversion.
It's very convenient to use in the same way as other accounts for online banking and cash management acccount for sales or purchases of shares.

Initial investment is a different story - they do take a decent cut on the exchange conversion, although it seems to be around 1-2% rather than 4%.
Some dividend paying ASX cos now also require Australian bank accounts and no longer send dividend cheques.

Storing your ASX trading funds in an ASB Foreign Currency AUD account would assist you on the conversion issue.

Although foreign currency dividends cannot be directed credited to an ASB Foreign Currency A/c.

Foreign Currency dividend cheques can be deposited to a ASB Foreign Currency A/c at a Branch for the time being.....

[percy]

Link in Aussie have an arrangement with OFX,where OFX will pay your divie into your NZ bank a/c.
I have just signed up for it,however as my next divies from PTB and SHM [both using Link] are a couple of months away, I am not sure how successful it will be.
To save issues I go for DRP when available.

[Nor]

I looked into Australian dollar account with my NZ bank and as far as I could see they would take a $15 fee for every deposit, dividend or otherwise. Ok for some of you big boys I suppose but not me.

[Norwest]

Link in Aussie have an arrangement with OFX,where OFX will pay your divie into your NZ bank a/c.
I have just signed up for it,however as my next divies from PTB and SHM [both using Link] are a couple of months away, I am not sure how successful it will be.
To save issues I go for DRP when available.

You don't need to be registered with OFX for Link Australia to transfer dividends to NZ bank accounts, use can just use wire transfer percy. Computershare Australia is the same.

I find that Link Australia takes less arbitrage on the currency conversion than Computershare Australia. Link Australia will also clearly display the currency conversion for you, where as Computershare Australia makes you work it out yourself, I wonder why :t_down:

[Scrunch]

Sharesies allow Oz trading - 1/2 of a percent no minimum / minimum commission/brokerage for buys / sells

May be some ASX companies they don't include on their tradeable lists (eg options) but they have many / most listed Aust Ords of significance from what I have observed.

Larger orders possibly qualify for lower commission rate.

Sharesies holdings are held in Sharesies Nominee Ltd nominee name on behalf, but can be transferred into your own name I guess

They collect dividends on your behalf/ pay tax for you & you can transfer between NZD AU or USD balances in your account wallet (a small exchange margin is charged & you top up wallet from NZ account or credit card)

No need for your own Aussie bank account

With sharesies its a once off fx charge to get cash into AUD of about 0.4%. After that you can do same day movements. Yesterday i thought one lithium stock was relatively undervalued. Sold some, bought the other. All same 10min slot, sold nd bought as AUD. The biggest issue with sharesies is if you want out on an illiquid stock, you won't always have the trade sold down to the waiting bit you are trying to hit. Sometimes they try to improve on the limit set. Its saved me dollars in some instances but in others... I've had frequent 1-5 second order execution.

[Charlie]

Thanks all for the very helpful comments .

[ronaldson]

I think you can open an AU bank account without being resident in Australia, at least if you are in Australia when you apply to do so ( and have your Passport and perhaps evidence of your address and anything else needed to comply with " know your customer " and anti money laundering requirements ). I have had an account with Bendigo Bank for some years, opened one holiday time, and it receives dividends in the usual manner, pays up rights issues and any other ASX transactions I need to undertake, and facilitates internet banking in the usual manner. Of course I Buy/Sell on the ASX using my NZ Broker ( DB ) and their AU Cash Management Account normally, already adequately funded.

One point is that I have a Debit Card that hangs off the account and enables me to be cashless when I travel there ( usually three times a year ) or use an ATM, thus avoiding using my NZ credit card and incurring exchange and other fees. But you shouldn't expect to be issued with a Credit Card because the difficulty of the bank having recourse if you defaulted.

I initially funded the account using OFX where my Family trust has an account, originally established to facilitate occasional distributions to family beneficiaries now living in AU, as while this involves exchange rates it is substantially more favorable than the same transaction undertaken via ( any ) NZ Bank's forex system as other posters have pointed out.

[Wright]

What about interactive brokers?

[caenix]

What about interactive brokers?

I use Interactive Brokers for ASX and US markets.

You can deposit (and withdraw) NZD directly into your account at IB with no fee. Then you can trade them into other currencies to buy stocks on the respective markets. Since you are trading your NZD to other currencies directly with other traders, you get the real-time spot price for the conversion with pretty much no margin other than the bid-ask spread. The only cost will be a nominal commission, $2USD for people who are not trading millions $$.

Dividends are paid into your IB account in their original currency.

Commission for ASX trade is 0.08% with a minimum of $6AUD per trade on the fixed commission plan.

The main pros for IB is that the fees are cheap and orders execute pretty much immediately.

Some of the cons:
- User experience is clunky (their biggest complaint since forever)
- Can't participate in DRP and can't vote for ASX holdings (at least I haven't figured out how to). No problem with participating in capital raises though.

[Wright]

Thanks caenix, do they have euro, us and ausy dollar accounts or do they trade from your nz dollar account each time?




I use Interactive Brokers for ASX and US markets.

You can deposit (and withdraw) NZD directly into your account at IB with no fee. Then you can trade them into other currencies to buy stocks on the respective markets. Since you are trading your NZD to other currencies directly with other traders, you get the real-time spot price for the conversion with pretty much no margin other than the bid-ask spread. The only cost will be a nominal commission, $2USD for people who are not trading millions $$.

Dividends are paid into your IB account in their original currency.

Commission for ASX trade is 0.08% with a minimum of $6AUD per trade on the fixed commission plan.

The main pros for IB is that the fees are cheap and orders execute pretty much immediately.

Some of the cons:
- User experience is clunky (their biggest complaint since forever)
- Can't participate in DRP and can't vote for ASX holdings (at least I haven't figured out how to). No problem with participating in capital raises though.

[caenix]

Thanks caenix, do they have euro, us and ausy dollar accounts or do they trade from your nz dollar account each time?

Yes, you can have different currencies sitting in your account, and then use it to buy stocks whenever you want.

[RRR]

Suggestion to Charlie

1, Open AUD currency account with ASB

2, Transfer money from the current account to AUD currency account using OFX (you will have to create an account with OFX first) as and when required (their exchange rate is much better than bank rates and customer service is excellent if you have any issues). You could use other foreign currency exchanges.

You could also transfer from ASB NZD account to AUD account (instant transfer) but this is very expensive. I typically save approx $150-200 NZD by transferring using OFX - I usually transfer $10 K at a time. The only issue is it takes longer to transfer, allow 2 working days...

3, Buy shares listed in ASX using the money deposited in the AUD account

4, All ASX dividends also gets credited to this account - thus avoiding foreign exchange fees and other charges

5, All resident withholding taxes are also taken out from AUD account

I usually have a few thousand AUD $ in my account and I transfer to this account from NZD when FX rates are favourable..