Hang Seng Enterprise Index Expanding, Adding Tencent.

The Hang Seng Enterprises Index, or HSCEI, will be dramatically growing from 40 to 50 stocks; eliminating one while adding 11 others.  Since the additions include red-chips, and P-chips, it will shed its H-share index moniker.  This is the first increase since 2010.

Red chips are mainland-based companies incorporated internationally and listed in Hong Kong, while P-chips are private Chinese enterprises controlled by mainland individuals.

While the number of stocks will increase by only 25%, the market cap combined holdings will more than double, based on the last share closing prices.  The large increase is primarily due to Tencent, 700hk and China Mobile, 941hk.

HSCEI Changes

The additions will diversify the finance-heavy index, with technology company Tencent representing the largest by market cap for the reformed index.

The HSCEI dropped over 5% today, along with most Asian indexes, following the US widespread record-breaking market drop on Monday.  Both the HSCEI and the HSI, have been among the top international index performers over the last 12 months.

HSI HSCEI Performance

The additions are to be phased in, starting March 5, 2018, as announced earlier.

HSCEI phase-in

Per the announcement,  a A Hang Seng H-Share Index will be launched covering the 40 H shares in the HSCEI to cater for market interest in such a benchmark.

 

 

 

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