Hong Kong index compiler proposes adding 20 more stocks to main technology tracker

Hong Kong index compiler proposes adding 20 more stocks to main technology tracker Hang Seng Indexes Company says expanded 50-constituent index would feature 10 fastest-growing companies that would not qualify by market cap Hang Seng Indexes Company plans to expand the Hang Seng Tech Index (HSTECH) to 50 constituents and introduce “sales growth” as a selection criterion to strengthen market representation, according to a consultation paper released on Monday. Hong Kong’s major stock index compiler proposed increasing the number of HSTECH constituents from 30 to 50, using a dual-selection framework. The top 40 stocks will be selected by market capitalisation, while the remaining 10 will be picked based on revenue growth. “Fast-growing technology companies often have smaller market capitalisations,” the company said. “The traditional market-cap framework prevents these high-growth companies from being included.” To maintain index investability, the selection pool will narrow from all main board-listed securities to constituents of the Hang Seng Composite LargeCap & MidCap Index. Launched in 2020, HSTECH currently tracks the 30 largest Hong Kong-listed tech companies by market capitalisation, with assets under management by investment products passively tracking the index reaching US$40.4 billion by June. The paper also suggested removing fixed sector requirements, because tech innovation now spanned traditional industries. [Image text:] HKEX 70.7 HKEX 129 8,947 6 ONAS 775018132