Budweiser, Anta Sports and Meituan join Hang Seng Index, displacing Swire Pacific from Hong Kong’s stock benchmark
- Meituan will get a 5 per cent weighting, in a long-awaited move that will raise the status of technology companies in Asia’s third-largest stock market
- The number of index constituents expands to 52 from 50 in the latest quarterly ‘rebalancing’ of the stocks gauge
“The Hang Seng Index looks set to include more new-economy stocks in the future, which will be an even greater allure for large tech companies to list in Hong Kong,” said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai.
The index compiler submitted an initial proposal to its advisory committee after launching a comprehensive study on the composition of the Hang Seng Index in August, according to the statement. It will announce the results in February after consulting market participants on it.
The review was triggered by the “fast expanding innovation and new economy sectors in the Hong Kong capital market”, the company said in a statement in August. It would cover things like the composition and selection of constituents, the number of constituents, their weightings, and industry and geographical representation, it said at the time.
In the last quarterly rebalancing of the index, in August, Alibaba, smartphone giant Xiaomi, and drug development company WuXi Biologics gained approval to become part of the Hang Seng Index. Shares of Xiaomi have soared 125 per cent so far this year, while WuXi Biologics has advanced 148 per cent. Alibaba has climbed 24 per cent, after a recent plunge when Ant Group’s suspended listing trimmed some of its earlier gains.
The market value of the Hang Seng Index has leaped by a third so far this year to a historical high of HK$24.3 trillion (US$3.1 trillion) on Friday. It received a huge boost from the trio’s inclusion in September, after recovering from a sharp drop in March over the coronavirus outbreak.
After the December rebalancing, Chinese social media and online games giant Tencent Holdings will remain the most-heavily weighted stock, making up 10 per cent of the index, slightly lower than the 10.8 per cent it currently enjoys. Insurer AIA Group will trail Tencent with a weighting of 10 per cent, down from 10.4 per cent.