Balancing books

20 May 2020 By Alec Macfarlane

The main Hang Seng tracker is welcoming companies with secondary listings and dual-class shares, opening the door to Alibaba, Xiaomi and more. That will help diversify baskets overstuffed with banks and such. It also underscores the local bourse’s plight to attract tech startups.

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Hong Kong’s Hang Seng Index said on May 18 that it changed its rules to, among other things, allow it to incorporate companies with secondary listings and those with weighted-voting rights.

The move paves the way for e-commerce titan Alibaba, food-delivery company Meituan Dianping and smartphone maker Xiaomi to be incorporated into the 51-year-old benchmark index.

The decision was made following a consultation conducted in the first quarter of 2020. More than 90% of market participants voted in favour of the changes, HSI said in a statement.

Each of the new constituents will be subject to a 5% weighting cap.

The index compiler will implement the changes to the HSI and the Hang Seng China Enterprises Index starting from its August 2020 index review

Context News

Hong Kong’s Hang Seng Index said on May 18 that it changed its rules to, among other things, allow it to incorporate companies with secondary listings and those with weighted-voting rights.

The move paves the way for e-commerce titan Alibaba, food-delivery company Meituan Dianping and smartphone maker Xiaomi to be incorporated into the 51-year-old benchmark index.

The decision was made following a consultation conducted in the first quarter of 2020. More than 90% of market participants voted in favour of the changes, HSI said in a statement.

Each of the new constituents will be subject to a 5% weighting cap.

The index compiler will implement the changes to the HSI and the Hang Seng China Enterprises Index starting from its August 2020 index review

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