Hang Seng Index: winning admirers and detractors alike as Corporate China holds sway over benchmark, returns
- Once anchored by colonial-era stalwarts like China Light & Power, TVB and Swire, the city’s benchmark is now dominated by mainland Chinese tech champions
- Global money managers overseeing 112 exchange-traded funds with more than US$50 billion of assets are using its menu of indices as benchmarks
Before the 1997 handover, the index was anchored by the city’s colonial-era household favourites like broadcaster TVB and flag-carrier Cathay Pacific Airways. Even SCMP Holdings, the publisher of this newspaper whose history dates back to 1903, was a cherished index constituent.
Today, China’s new economy leaders, from Alibaba Group Holding to Meituan, and state-controlled industry giants like oil producer CNOOC and China Mobile, are the dominant force among the index’s 69 constituents, claiming about two-thirds of the weighting.
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SCMP Explains: Hong Kong’s Tracker Fund
While making up only 53 per cent of the number of listed companies, Corporate China made up 78 per cent of the HK$37.9 trillion (US$4.8 billion) of market capitalisation at the end of May. For every HK$1 of daily stock transactions in the city, 87 cents involve mainland Chinese stocks.