Hang Seng launches three ‘southbound’ Hong Kong Stock Connect indices

Nov 21st, 2017 | By | Category: ETF and Index News

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Hang Seng Indexes has launched three indices tracking Hong Kong- and China-based equities listed on the Hong Kong Stock Exchange that are accessible through the southbound trading link of the Stock Connect Hong Kong (SCHK) schemes.

Hang Seng launches three Hong Kong Stock Connect indices

Hong Kong-based index provider Hang Seng Indexes has launched three Hong Kong Stock Connect indices.

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 may be used as investable references for investors or as underlying references for product issuers in mainland China, such as ETF providers.

The Hang Seng SCHK HK Companies Index and the Hang Seng SCHK Mainland China Companies Index offer investors references for the performance of Hong Kong-listed companies with different geographical business focuses.

The first index contains companies which are listed and domiciled in Hong Kong. It has 74 constituents, the largest being AIA Group (10.7%), HSBC (9.8%), Hong Kong Exchanges and Clearing (7.3%) and CK Hutchison (7.1%).

The second contains all the Hong Kong listings of companies domiciled in Mainland China. These include Red-Chips, P-Chips, H-shares without A-shares listings, and H-shares with A-shares listings. It has 275 constituents, the largest of which is Tencent Holdings (11.5%), China Construction Bank (8.1%) and China Mobile (5.3%).

The Hang Seng SCHK ex-AH Companies Index tracks companies only listed in Hong Kong, providing relevant benchmarks for southbound trading investors in the Mainland. This includes shares of companies domiciled in Hong Kong, as well as Red-Chips, P-Chips, and H-shares without A-shares listings. It has 281 constituents, the largest of which is Tencent Holdings (11.6%), HSBC (9.3%), AIA Group (7.8%), and China Mobile (4.7%).

Each index is reconstituted and rebalanced semi-annually with weights determined by free-float market cap constrained by a 10% cap on individual constituents. The indices are calculated in Hong Kong dollars.

Vincent Kwan, director & general manager of Hang Seng Indexes, commented: “Amid the dynamic cross-market activities between the stock exchanges in Hong Kong, Shanghai and Shenzhen, the launch of these three new indices is another step to enrich our SCHK index range. Hang Seng Indexes will continue developing new indices to provide investors with a diverse range of referencing benchmarks.”

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