Hang Seng Indexes has launched the Hang Seng Stock Connect Hong Kong Big Bay Area Index, an equity index reflecting the performance of Hong Kong-listed companies that operate in the Guangdong-Hong Kong-Macao bay area and are eligible for southbound trading under the Stock Connect scheme.
The index provides exposure to HK-listed shares of Chinese companies that mainly operate within the Guangdong-Hong Kong-Macao Big Bay Area.
The area encompasses nine cities and two Special Administrative Regions, namely Hong Kong, Macao, Guangzhou, Shenzhen, Zhuhai, Foshan, Zhongshan, Dongguan, Zhaoqing, Huizhou and Jiangmen.
Daniel Wong, Director & Head of Research and Analytics at Hang Seng Indexes, commented, “The investment theme of the Big Bay Area is of increasing interest among investors. In May this year, we launched the Hang Seng Stock Connect Big Bay Area Composite Index, a cross-market index that can also serve as the basis for developing further indexes on the same theme.
“The Hang Seng Stock Connect Hong Kong Big Bay Area Index focuses on companies operating in the Big Bay Area that are listed in Hong Kong, providing a valuable investable benchmark for this dynamic segment.”
The universe of the new index consists of Hong Kong-listed constituents of the parent Hang Seng Big Bay Area Composite Index, which launched in May of this year.
The parent index includes the largest 250 Hong Kong-listed stocks and Mainland-listed A-Shares that derived at least 50% of their revenue from the Big Bay Area in the latest complete fiscal year. Stocks must also be participating in Northbound or Southbound trading under the Stock Connect scheme to be eligible for index inclusion.
The new Hong Kong-focused index is weighted by free float-adjusted market-cap with a 15% cap on individual securities. Reconstitution and rebalancing occur on a semi-annual basis.
There are currently 66 constituents in the index. The largest of these are Tencent Holdings and Ping An Insurance with weights of 14.7% and 11.7% respectively. The index also notable exposure to Hong Kong Exchanges and Clearing (7.0%), Hang Seng Bank (4.5%) and CK Asset Holdings (4.0%).