Hang Seng Index to Include Alibaba, Xiaomi from 7 September

Source: Regulation Asia Editors, Regulation Asia 2020-08-17

The changes reflect a May decision to allow weighted voting rights and secondary-listed companies from the Mainland to be included as HSI and HSCEI constituents.

Hang Seng Indexes Company has announced the results of its review of the Hang Seng Family of Indexes for the quarter ended 30 June 2020.

E-commerce giant Alibaba and smartphone maker Xiaomi will be included in both the HSI (Hang Seng Index) and HSCEI (Hang Seng China Enterprises Index), subject to a 5 percent weighting cap.

China’s largest drugs development and manufacturing services provider, WuXi Biologics, will also join the HSI as a constituent.

Food delivery firm Meituan Dianping, the only other WVR company listed in Hong Kong besides Alibaba and Xiaomi, will be included in the HSCEI.

The changes reflect a May decision to allow WVR (weighted voting rights) and secondary-listed companies from the Mainland to be included as constituents of both the HSI and HSCEI.

The changes, detailed in full here, will take effect on 7 September 2020 (Monday).

Mainland investors are not yet allowed to trade secondary-listed companies in Hong Kong via Stock Connect, but they are allowed to trade WVR companies six months after their listings.

Hang Seng Indexes will conduct a further comprehensive study on the HSI, encompassing the composition and selection of constituents, number of constituents, weightings, and industry and geographical representation, among other considerations.

“The underlying aim of the study is to ensure the Hang Seng Index continues to serve as the most representative and important benchmark of the Hong Kong stock market,” the index compiler said.

Hang Seng Indexes will report its findings and recommendations to the Advisory Committee within six months.

Last month, Hang Seng Indexes launched a new index tracking the 30 largest tech companies listed in the city, including Tencent, Alibaba, Meituan Dianping and Xiaomi.

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Hang Seng Index to Include Alibaba, Xiaomi from 7 September

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