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Hang Seng Tech Index set for expansion to 50 constituents
Hang Seng Indexes Company also plans to use revenue growth for 10 of the new slots, aiming to bring smaller, faster growing tech firms into the benchmark.
Hong Kong’s Hang Seng Indexes Company plans to expand the Hang Seng Tech Index, or HSTECH, to 50 constituents and adjust how companies are selected, according to a consultation paper released on Monday.
The index compiler proposes raising the number of constituents from 30 to 50 using a dual-selection framework. It would choose the top 40 stocks by market capitalization, while the remaining 10 would be selected based on revenue growth, a change intended to better represent fast-growing technology firms that may have smaller market caps.
To keep the index investable, the selection pool would be limited to constituents of the Hang Seng Composite LargeCap & MidCap Index, rather than all main board listed securities. The paper also suggested removing fixed sector requirements, saying technology innovation has broadened across traditional industries.
HSTECH, launched in 2020, currently tracks the 30 largest Hong Kong listed tech companies by market capitalization, with passive investment products tied to the index reaching US$40.4 billion by June, the company said.
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