Hong Kong index compiler proposes adding 20 more stocks to main technology tracker
Hang Seng Indexes Company says expanded 50-constituent index would feature 10 fastest-growing companies, irrespective of market cap
Hang Seng Indexes Company plans to expand the Hang Seng Tech Index (HSTECH) to 50 constituents and introduce “sales growth” as a criterion for selection to strengthen market representation, according to a consultation paper released on Monday.
Hong Kong’s major stock index compiler proposed increasing the number of HSTECH constituents from 30 to 50, using a dual-selection framework. The top 40 stocks will be selected by market capitalisation, while the remaining 10 will be picked based on revenue growth.
“Fast-growing technology companies often have smaller market capitalisations,” the company said. “The traditional market-cap framework prevents these high-growth companies from being included.”
To maintain index investability, the selection pool will narrow from all main board-listed securities to constituents of the Hang Seng Composite LargeCap & MidCap Index.
Launched in 2020, HSTECH currently tracks the 30 largest Hong Kong-listed tech companies by market capitalisation, with assets under management by investment products passively tracking the index reaching US$40.4 billion by June.
The paper also suggested removing fixed sector requirements, because tech innovation now spanned traditional industries.