Alibaba Health, Longfor and Haidilao to join blue chips on Hong Kong’s benchmark Hang Seng Index

The addition of the three stocks to the index from March 15 will expand the number of constituents from 52 to 55, according to a statement from Hang Seng Indexes on Friday evening

The Hang Seng Index will add in three more stocks, potentially paving the way for a further expansion to 80, brokers say

Reading Time:3 minutes

A electric monitor shows the Hang Seng Index in Central, Hong Kong. Photo: Sam Tsang

Published: 7:32pm, 26 Feb 2021Updated: 7:37pm, 26 Feb 2021

Alibaba Health Information Technology, mainland Chinese developer Longfor Group Holdings and hotpot chain Haidilao International Holding will become constituent stocks of the Hang Seng Index from next month, the complier announced just before it is expected to unveil a further major expansion on Monday.

The addition of the three stocks to the index from March 15 will expand the number of constituents on Hong Kong’s benchmark index from 52 to 55, according to a statement from Hang Seng Indexes on Friday evening.

The index compiler proposed in December to increase its constituent stocks to between 65 and 80 to achieve a reasonable representation for each industry. Today’s move has prompted analysts to believe the further expansion may be announced a soon as Monday, when the results of a consultation are due to be revealed.

The compiler also wants the benchmark index to have at least 25 Hong Kong firms as constituent stocks to address concerns about a drop in the representation of local companies. A consultation on the proposals ended last month.

“The Hang Seng Indexes intends to increase the number of blue chips for the longer term to allow more companies from different sectors to have more representation,” said Kenny Ng Lai-yin, a securities strategist at Everbright Sun Hung Kai.

Ng said the three new stocks set to become blue chips would get share price support, while JD.com, which had been widely expected to join the index, may face pressure in the short-term.