Hello, the Hang Seng Index is the Hang Seng Index, abbreviated as: HSI. It is an important indicator of Hong Kong stock market prices. The index is calculated from the market value of a number of constituent stocks (i.e. blue-chip stocks). It represents 63% of the 12-month average market value coverage of all listed companies on the Hong Kong Stock Exchange. The Hang Seng Index is controlled by Hang Seng Bank, a subsidiary of Hang Seng Bank. The Index Co., Ltd. is responsible for calculation and quarterly review, and announces adjustments to constituent stocks.
The Hang Seng Index is compiled by Hang Seng Index Services Co., Ltd., a wholly-owned subsidiary of Hang Seng Bank in Hong Kong. It uses 33 representative listed stocks in the Hong Kong stock market as constituent samples and is weighted by their issuance volume. The weighted average stock price index is the most influential stock price index that reflects the price fluctuation trend of the Hong Kong stock market. The index was first publicly released on November 24, 1969, with a base period of July 31, 1964. The base period index is set at 100.
The constituent stocks of the Hang Seng Index
The constituent stocks of the Hang Seng Index have broad market representation, and their total market value accounts for about 90% of the total market capitalization of the Hong Kong Stock Exchange. In order to further reflect the price trends of various stocks in the market, the Hang Seng Index began to publish four sub-indices in 1985, and included 33 constituent stocks into the four sub-indices of industrial and commercial, financial, real estate and public utilities.
Hang Seng Index constituent stocks must be on the main board and have their primary listing place in Hong Kong. If it is a state-owned enterprise stock, it can be used as long as it meets one of the following points. The H-share company's share capital is listed on the Hong Kong Stock Exchange as national enterprise shares.
·The H-share company needs to complete the share-trading reform and has no non-circulating share capital.
·Newly listed H-share companies have no unlisted share capital.
·Must be among the top 90% of the total market value of all ordinary shares (excluding H shares) listed on the Stock Exchange (market value refers to the average value within the past year);
·Must be among the top 90% of the trading volume of all ordinary shares (excluding H shares) listed on the Stock Exchange (the trading volume refers to the total trading volume in the past two years divided into eight quarters for assessment); or it must be in Large-cap stocks that have been listed on the Stock Exchange for more than two years or meet the relevant guidelines for inclusion in the Hang Seng Index have been listed for less than two years.
Principles for selecting constituent stocks of the Hang Seng Index
(1) Select stocks according to their market capitalization, which must be among the stocks that account for 90% of the total market value of all ordinary shares listed on the Stock Exchange. (Market capitalization refers to the average of the past 12 months).
(2) Selected based on trading volume, it must be among the stocks that account for 90% of the trading volume of all ordinary shares listed on the Stock Exchange (the trading volume refers to the total trading volume in the past 24 months).
(3) It must be listed on the Stock Exchange for more than 24 months.
Principles for selecting sample stocks
(1) Ranking of company market capitalization and trading volume.
(2) The proportions of each of the four sub-indices in the Hang Seng Index need to generally reflect market conditions.
(3) The company has huge business in Hong Kong.
(4) The company’s financial status.