Hang Seng Indexes has launched the Hang Seng SCHK New Economy Index, reflecting the performance of Chinese ‘new economy’ equities that are accessible through the southbound trading link of the Stock Connect Hong Kong (SCHK) schemes.
The index tracks the performance of companies operating in China’s ‘new economy’ industries.
The SCHK programme allows Hong Kong-based investors to trade stocks listed on either the Shanghai or Shenzhen stock exchanges (northbound transactions) and similarly grants Chinese investors access to Hong Kong-listed shares through trading on the Shanghai or Shenzhen stock exchanges (southbound transactions).
According to the Hong Kong-based index provider, the indices are suitable for use as performance benchmarks or as underlying references for index-linked investment products such as ETFs.
The new index provides a reference for investors who are interested in companies focusing on so-called ‘new economy’ industries in China, spanning new technology, healthcare and pharmaceuticals.
The index universe covers securities from 29 sub-sectors, including automobiles, telecommunication services and pharmaceuticals. In addition, companies in the ‘old economy’ industries of consumer goods, consumer services and financials that mainly conduct their business using an online platform are also eligible for inclusion.
The largest constituents in the index are Tencent Holdings (10.8%), China Mobile (9.5%), Geely Automobile (6.8%), AAC Technologies (5.1%) and Techtronic Industries (3.7%) (data as of 5 January 2018).
Hang Seng Indexes will review the sector requirements on an annual basis to keep the index in line with the evolving concept of new economy.
Vincent Kwan, director & general manager of Hang Seng Indexes, said, “With the fast-paced development of the new economy sector, awareness and interest in this investment concept is rapidly rising among investors. The Hang Seng SCHK New Economy Index is our response to the growing demand for a comprehensive and dynamic index that tracks the performance of companies in the Hong Kong market that operate in this sector.”
The index comes on the back of another three index launches by Hang Seng Indexes in November 2017. These indices also focused on equities available for trading through the southbound trading link of the SCHK programme.