Hang Seng adds Country Garden unit, Xinyi Solar and Buffett-backed BYD to kick off its biggest index overhaul in half a century
- The move will raise the constituent stocks to 58 on June 7 as part of the compiler’s plan to widen the membership to 80 by mid-2022
- The rebalancing will reduce the weighting of AIA, Tencent and HSBC, raise Alibaba’s portion as a result of a new cap on each stock
The three new members will raise the number of constituents on Hong Kong’s benchmark index to 58 with effect from June 7, according to a statement by Hang Seng Indexes.
The addition, first foreshadowed in March, is part of a plan to broaden the key gauge of Asia’s second-largest capital market from 55 to 80 by mid-2022, as the index compiler overhauls its flagship index to better reflect how Hong Kong’s financial market has evolved since 1969. The plan would add about five stocks to the index every three months for five successive quarters in the first phase, eventually reaching 100 stocks in the longer term.
“The new enhancements to the HSI will further increase its representation and make the index more balanced and diversified,” Anita Mo, chief executive of Hang Seng Indexes Company, said when the overhaul was first announced in March.
The three stocks will carry a combined weighting of 2.41 per cent on the Hang Seng Index, with BYD the biggest at 0.98 per cent, Country Garden Services at 0.97 per cent, and Xinyi solar at 0.46 per cent.
