Advertisement
Hang Seng Index
BusinessBanking & Finance

Hang Seng Tech Index to shine light on smaller firms that juice fund returns in the shadows of Alibaba, Tencent

  • Index makes a promising start but fades away on its debut in what is likely to be a hiccup in the big picture
  • Fund managers may adjust their investment according to the weighting of the new index

Reading Time:2 minutes
Why you can trust SCMP
View of the HKEX flag at the Exchange Square in Central. Photo: Winson Wong
Enoch Yiu
Hong Kong’s new gauge to track the biggest technology companies listed on the city’s stock exchange fizzled out after a strong start on Monday. Despite the wobble, the debut could benefit smaller firms that have juiced returns for investors this year.
The new index declined 1.3 per cent to 6,774.78 points, swinging from as much as 2.2 per cent gain. Meituan Dianping and Xiaomi both slipped 3 per cent while Tencent retreated 1.5 per cent. Overall, 23 members fell today, while six gained and one was unchanged.
While household names such as Alibaba Group Holding and Tencent Holdings have been stealing the limelight in recent months, smaller tech peers have generated market-beating performance of 140 to 225 per cent gains through July 24, according to data compiled by the South China Morning Post.

The new index may give such smaller technology companies the attention from funds that seek to replicate the index’s trajectory, according to stockbrokers. Cloud-based marketing provider Weimob, game developer XD and software provider Kingdee International Software ranked among the best performers this year, while the broader Hang Seng Composite Index slipped 3 per cent.

Advertisement

“The new index will have a positive effect on Hong Kong technology stocks, especially for those included in the index,” said Kenny Ng Lai-yin, securities strategist at Everbright Sun Hung Kai.

The tech index comes amid the “homecoming” of some of China’s technology trailblazers from the US markets to Hong Kong and Shanghai, including those of JD.com and NetEase. Ant Group has announced plans for a concurrent listing in Hong Kong and Shanghai. Alibaba, which owns about a third of the operator of Alipay payments system, is also the owner of the Post. Its shares have risen 15.4 per cent this year. They were little changed today.
Advertisement
Advertisement
Select Voice
Choose your listening speed
Get through articles 2x faster
1.25x
250 WPM
Slow
Average
Fast
1.25x