HONG KONG: Hang Seng Indexes said on Monday (Mar 1) it would shake up the main Hong Kong stock benchmark with the goal of including 100 companies, part of an effort to ensure the index better reflects the range of firms listed in Hong Kong.
The Hang Seng Index has historically been dominated by financial services institutions, and even after recent tweaks and additions, these currently account for 40 per cent of the benchmark.
Tech giant Tencent, insurer AIA, and HSBC combined currently make up just shy of 30 per cent of the index.
The changes included increasing the number of constituents of the Hang Seng Index to as many as 80 by mid-2022 from the 52 now, with an eventual goal of reaching 100, the provider said.
It would also shrink the weighting cap on individual constituents to 8 per cent from 10 per cent now, and remove a lower weighting cap of 5 per cent for companies whose shares come with different classes of voting rights, Hang Seng Indexes said.
“The new enhancements to the HSI will further increase its representation and make the Index more balanced and diversified," Anita Mo, Chief Executive Officer of Hang Seng Indexes Company, said in a statement.
The Hang Seng Index reached an all-time high in February, thanks in part to trading by mainland China-based investors.
The Stock Exchange of Hong Kong was the second most popular listing venue in the world in 2020 with deals worth US$31.2 billion, compared to Nasdaq's US$51.3 billion, according to Refinitiv data.
Earlier this year, Chinese online video service operator year, Kuaishou raised US$6.22 billion after exercising its over-allotment option.