Hong Kong Exchanges and Clearing and Standard & Poor's have signed an agreement to launch a series of new indices in October. The new S&P/HKEx index series will replace HKEx's existing All Ordinaries Index (AOI) and Growth Enterprise Index (GEI). S&P's will allow other financial institutions to apply for licences to develop derivative financial products such as exchange-traded funds, index funds, futures and options. The exchange said three new main board indices would be launched, including the S&P/HKEx 25 comprising 25 large-cap stocks and representing about 75 per cent of the main board's market capitalisation. The S&P/HKEx MidCap 25 will cover medium-sized companies, while smaller stocks will be represented by the S&P/HKEx SmallCap 50. S&P will also calculate a composite of the three indices called the S&P/HKEx Composite. In addition, it will create a new S&P/HKEx index covering the Growth Enterprise Market. S&P will handle index calculation and will disseminate real-time information on the indices from October. HKEx said all Hong Kong and mainland Chinese companies were eligible for inclusion in the new index series. The benchmark Hang Seng Index does not include mainland companies. Harold McGraw, chairman and chief executive of S&P parent McGraw-Hill, said: 'The new S&P/HKEx index series recognises the increasingly complementary nature of the economies of Hong Kong and the mainland of China, and we believe investors throughout the world will embrace the new indices as the best representation of the region's equity market.' S&P will consider the free float ratio and liquidity of stocks when deciding how they should be weighted in the indices. The HSI does not consider the free float. S&P said it would open an index services office in Hong Kong as its regional headquarters. David Collins of S&P Japan will move to Hong Kong next month to become managing director of the company's index business in the Asia-Pacific region.