Hang Seng expansion planned amid major IPOs

Tuesday, 22. December 2020 13:59

Hang Seng Indexes published on Tuesday five consultation proposals that aim to overhaul the 52-component index by expanding it so it lists up to 80 companies, the Nikkei reported on Tuesday. According to the document, the proposals should ensure the Hang Seng Index continues to "serve as the most representative and important benchmark of the Hong Kong stock market."

Several large companies, including Alibaba Group, JD.com, NetEase Inc. and Xiaomi Corp., have listed on the index over the last two years. The latest proposals are supposed to stop the falling decline of the benchmark's relevance, as the Hang Seng Index dropped to 57.6% of the city's total stock market value. The time needed for inclusion in the index will likely also be shortened from the existing period of between three months and two years.

The consultations are opened through January 24, while the decision is scheduled to be announced in February next year. The Hang Seng was strongly hit by the coronavirus pandemic last March, causing stocks to crash. However, it rebounded only partly, as the index stands over 7% lower compared to the start of 2020.

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Breaking the News / ND