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Hong Kong stocks retreat as index revamp dents AIA and Tencent while new member BYD surges

  • Quarterly rebalancing to trim the weighting of AIA, Tencent and HSBC under a new 8 per cent cap on each stock, while two joiners surge
  • HKEX dropped as Aguzin started his reign as CEO, becoming one of the highest-paid regulators with at least US$13.67 million pay package

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People walk past a bank's electronic board showing the Hang Seng Index at Hong Kong Stock Exchange near Central. Photo: AP
Martin Choi
Hong Kong stocks slipped after the biggest index overhaul of the city’s stock benchmark reduced the weighting of top-tier AIA Group, Tencent Holdings and HSBC. Two index joiners advanced while Hong Kong Exchanges and Clearing weakened as a new boss takes over.
The Hang Seng Index slipped 0.2 per cent to 28,412.26, after its first weekly gain in four. Tencent retreated 0.2 per cent to HK$585.50 while AIA lost 0.2 per cent to HK$101.50 with both paring bigger losses during the day.
The index compiler, Hang Seng Indexes Company, will add Warren Buffett-backed carmaker and battery producer BYD, the solar panel glass manufacturer Xinyi Solar and property management firm Country Garden Services from June 7, raising the total constituents to 58, according to a statement late Friday.

BYD gained 2.3 per cent to HK$167.60, reaching its highest level since April 29. Country Garden Services added 2.8 per cent to HK$80.05, reaching its highest level since May 6. Xinyi Solar slipped 0.5 per cent to HK$13.12, after earlier rising as much as 5.5 per cent to HK$13.90.

The quarterly rebalancing will reduce the representation of index heavyweights because of an 8 per cent cap on each index member, affecting AIA (current weight 10.1 per cent), Tencent (9.1 per cent) and HSBC (8.3 per cent).
Hong Kong Exchanges and Clearing fell 0.7 per cent to HK$450.40. The city’s bourse operator made Nicolas Aguzin one of the highest paid regulators in the city with a pay package of at least HK$106 million (US$13.67 million) as its chief executive officer.

The former JPMorgan Chase private banker takes over from Monday, calling his appointment “an honour, a privilege, and a great responsibility,” according to a press statement.

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