HONG Kong’s Hang Seng Index may add more electric vehicle (EV) and foreign firms in its upcoming quarterly review as the exchange progresses towards its 100-member target.
Chinese EV maker XPeng and Hong Kong-listed foreign companies such as Prada are among potential candidates for inclusion in the stock benchmark, analysts said. Hang Seng Indexes is due to announce the results of the review on Friday (Feb 16).
“Foreign companies listed on HKEX might also be included, with names such as Prada and Samsonite International in the consumer discretionary sector and Yancoal Australia elsewhere,” said Rebecca Sin, an analyst at Bloomberg Intelligence.
The addition of foreign stocks to the index may send a signal to more global companies to consider a listing in Hong Kong even as the city grapples with a slumping market. The Hang Seng gauge has slid more than 6 per cent this year, after its fourth straight annual loss in 2023.
Some healthcare names such as BeiGene and Innovent Biologics may also join the benchmark given that the sector is the only one that remains under-represented, with market cap coverage of less than 50 per cent, Sin said.
The reshuffle comes amid efforts to eventually expand the index to 100 members from 82 currently, and to achieve a more balanced representation of the city’s stock market.
“With a target of reaching 100 index constituents, we do not expect there will be any deletions from the HSI in March,” Brian Freitas, founder of Periscope Analytics, wrote in a note last month. Still, Hengan International Group and Country Garden Services Holdings are most at risk of a deletion, he said.
The changes, once announced, will take effect from Mar 4. BLOOMBERG
