Hang Seng rolls out four new equity indices

Dec 17th, 2019 | By | Category: ETF and Index News

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Hong Kong-based index provider Hang Seng Indexes has launched four new equity indices.

Hang Seng rolls out four new equity indices

All four indices target stocks listed on the Hong Kong stock exchange.

The new additions target stocks listed on the Hong Kong stock exchange, HKEX, and include broad market, sector-specific, and smart beta indices.

They are the Hang Seng Stock Connect Hong Kong Composite Index, the Hang Seng Hong Kong-Listed Biotech Index, the Hang Seng Large-Mid Cap Momentum Tilt Index, and the Hang Seng Large-Mid Cap Momentum 50 Index.

All four indices are denominated in Hong Kong dollars.

Stock connect

The Hang Seng Stock Connect Hong Kong Composite Index offers a comprehensive benchmark for the performance of stocks eligible for ‘Southbound Trading’ under the Stock Connect scheme – Hong Kong-listed equities permitted to trade on Mainland China. The index is weighted by float-adjusted market capitalization subject to a 10% cap per security. Newly eligible constituents are added to the index within two days.

Biotech

The Hang Seng Hong Kong-Listed Biotech Index covers a universe of stocks classified under ‘Biotechnology’, ‘Pharmaceuticals’ or ‘Medical Devices’ according to the Hang Seng Industry Classification System. The index includes stocks that rank in the top 95% of the universe by market cap and have a three-month daily traded value of at least HKD 5 million. Constituents are also weighted by float-adjusted market cap subject to a 10% cap. Reconstitution occurs on a quarterly basis.

Momentum

The Hang Seng Large-Mid Cap Momentum Tilt Index is constructed from the Hang Seng Composite LargeCap & MidCap Index universe which consists of all large- and mid-cap stocks listed on HKEX. Foreign companies and securities with insufficient trading history are removed. The remaining constituents are weighted according to ‘Momentum scores’ which are derived from the average of their three-month and twelve-month Current-to-High price ratios. Reconstitution occurs on a semi-annual basis.

The Hang Seng Large-Mid Cap Momentum 50 Index consists of the 50 stocks with the largest weights from the above Hang Seng Large-Mid Cap Momentum Tilt Index. Constituent weights are rebased to sum to 100%.

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