According to a research report from a leading investment bank, Hang Seng Indexes Company will announce the final results of the Hang Seng family index review after the market close on Friday, August 21, 2026, with implementation scheduled for Monday, September 7. Based on the Hang Seng Index's methodology and validation from previous actual adjustments, the bank projects that 8 stocks, including Z.AI (02513), MINIMAX-W (00100), and others, meet the inclusion criteria and rank high on the potential candidate list. The calculations prioritize market capitalization rankings, then consider industry representation and coverage factors. During this period, similar to MSCI index adjustments, some active funds may still engage in arbitrage based on the announced results, but passive funds will choose to rebalance on the trading day before the effective date (September 4) to minimize tracking error. Trading volumes in related stocks may experience "abnormal surges" far exceeding normal levels, particularly in the final minutes of trading.
The key points from the research are as follows: After the market close on Friday, August 21, 2026 (Beijing time), Hang Seng Indexes Company will announce the semi-annual review results (with the review cutoff date of June 30, 2026). This covers major Hong Kong flagship indices like the Hang Seng Index, Hang Seng China Enterprises Index, and Hang Seng Tech Index, as well as the Hang Seng Composite Index, which directly impacts the scope of southbound Stock Connect investments. Since semi-annual reviews typically involve significant changes, and the passive funds tracking these flagship indices are substantial (with Bloomberg and Wind data showing ETF tracking sizes of approximately $28.13 billion for the HSI, $7.52 billion for the HSCEI, and $50.69 billion for the HSTECH), potential component changes and associated capital flows warrant close attention. Based on available data, the bank provides the following forecasts for investor reference.
Hang Seng Index Adjustments: Z.AI, MINIMAX-W, and Others Meet Inclusion Criteria
Using the HSI adjustment methodology and validated by previous actual results, the bank calculates that 8 stocks meet the inclusion criteria and rank high on the potential candidate list. The bank's calculations prioritize market capitalization rankings, then incorporate industry representation and coverage factors. The bank estimates potential weightings and capital flows for these stocks in its chart. However, historical experience shows that actual results may differ from this quantitative screening order. For example, Yum China and BeiGene were predicted to be among the top candidates in past reviews but were ultimately not included. This is primarily because some HSI inclusion standards lack clear explanations or quantitative basis, such as industry and listing location representativeness, which involve subjective judgment.
Southbound Stock Connect Adjustments: 49 Stocks Expected to Join, 14 May Be Removed
This coincides with the semi-annual review of the Hang Seng Composite Index (adjusted twice a year, with cutoff dates on June 30 and December 31). The Hang Seng Composite Index serves as the sample pool for southbound investments, and its changes directly impact the investment scope of Stock Connect. The Hang Seng Indexes Company has optimized the calculation method for the 12-month average market capitalization of samples (from month-end averages to daily averages for non-suspended trading days) and the approach for handling long-suspended stocks (excluding market capitalization and liquidity data before resumption from calculations). Based on the latest methodology, the bank estimates that 49 stocks are likely to be included: Considering the Hang Seng Composite Index's constituent requirements and additional criteria for Stock Connect inclusion (such as market capitalization over HK$5 billion for small-cap stocks, excluding stocks under risk warnings, suspended from listing, or in delisting adjustment periods, and additional requirements for weighted voting rights companies, including 6 months and 20 days of listing and market capitalization and trading conditions), the bank estimates that a total of 49 stocks meet the inclusion criteria. However, due to limitations in the accuracy of publicly available data, the bank accepts a small margin of error by slightly relaxing the 94% coverage threshold for Hang Seng Composite Index inclusion. Under this assumption, companies like China Reinsurance, Mirxes Holding, and China Star Entertainment may also qualify, but with lower confidence rankings. It is important to note that although Yingxing Holding and Jin Hai Medical Technology meet the traditional inclusion criteria for market capitalization coverage and turnover rate in this round, both companies are currently on the Hong Kong Securities and Futures Commission's list of stocks with highly concentrated shareholdings. They issued voluntary announcements addressing the issue on May 16, 2025, and December 31, 2024, respectively, so inclusion in this round is not ruled out. Additionally, virtual asset platforms HashKey Group and OSL Group were included in the Hang Seng Composite Index in March this year. However, due to their nature as virtual asset platforms, they cannot currently be included in southbound Stock Connect, and the bank has seen no policy change announcements in the short term, so they are likely to remain excluded this time.
Some other companies may be included for different reasons: 1) Companies like Anker Innovations, Luxshare Precision, Chaozhou Three-Circle Group, Hefei Chipone Technology, and Zhongji Innolight, which were listed in Hong Kong since July, will be included in southbound Stock Connect in August following the end of their 30-day post-listing price stabilization period due to their A+H dual-listing status. 2) Weighted voting rights companies, such as MINIMAX-W (00100), which was listed in Hong Kong on January 9, 2025, and needs to meet the additional requirement of 6 months and 20 trading days of listing, is expected to be included in southbound Stock Connect in early August this year. However, other weighted voting rights companies like Sunmi Technology, which was listed on April 29, 2025, will have to wait until the end of this year for inclusion.
Fourteen stocks are expected to be removed: due to market capitalization coverage ranking below 96%, market capitalization below HK$4 billion, or suspension of trading, these stocks no longer meet the Hang Seng Composite Index conditions and will be removed from southbound Stock Connect. These include JS Global Lifestyle, Ming Yuan Cloud, IFBH, and others. Detailed removal forecasts are provided in the relevant chart.
Timeline: Results Announced on August 21, Implementation on September 7; Stock Connect Targets Adjust Accordingly
In terms of timing, Hang Seng Indexes Company will announce the final results of the Hang Seng family index review after the close on Friday, August 21, 2026, with implementation on Monday, September 7. After the index adjustment takes effect on September 7, the Shanghai and Shenzhen stock exchanges will subsequently adjust the eligible investment scope for Shanghai-Shenzhen-Hong Kong Stock Connect based on these results. During this period, similar to MSCI index adjustments, some active funds may engage in arbitrage based on the announced results, but passive funds will choose to rebalance on the trading day before the effective date (September 4) to minimize tracking error. Trading volumes in related stocks may experience "abnormal surges" far exceeding normal levels, particularly in the final minutes of trading.
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