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2021-03-02

Time to load up on BABA DLC

These Are the Winners and Losers of the Hang Seng Index Revamp

One of the biggest-ever revamps for Hong Kong’s benchmark Hang Seng Index will benefit the likes of

These Are the Winners and Losers of the Hang Seng Index Revamp

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The revamp also shortens the listing history requirement for a company to be included. Implementation of the changes will begin as early as the May index review and go through mid-2022.<img src=\"https://static.tigerbbs.com/6b8f58f1dd314a197a6746d365e27afa\" tg-width=\"659\" tg-height=\"563\" referrerpolicy=\"no-referrer\">Winners</p><ul><li>Firms that are secondary-listed or carry unequal voting rights, includingAlibaba Group Holding Ltd., Xiaomi Corp. and Meituan, will no longer be limited to 5% weightings on the index.</li><li>Consumer and health-care related stocks would see their sector weightings increase by 4 percentage points and 3 percentage points respectively at the expense of the financial sector, according to a research note by Goldman Sachs strategists including Si Fu.</li><li>The revamp is seen as good news for ETF providers, as more funds are expected to be lured to track the index. Goldman expects passive funds tracking the gauge to grow to $25 billion from the current $20 billion, “providing scope to bring additional inflows to all the index constituents.”</li><li><p>A more diversified membership and a higher weight of new-economy stocks will help the index performance as a whole, according to fund managers.</p><p>“As more new-economy firms join, the index is likely to test the level of 40,000 in the future,” said Paul Pong, managing director at Pegasus Fund Managers Ltd.</p></li></ul><p>Losers</p><ul><li>Under the new weighting cap, stocks that currently have a larger presence on the index could face redemptions by the passive funds, which could affectTencent Holdings Ltd.,AIA Group Ltd.andHSBC Holdings Plc., according to CGS-CIMB Securities International Pte and Everbright Sun Hung Kai Co.</li><li>Tencent could also potentially be pressured as the index opensup tomore Chinese technology firms, according to Pegasus Fund Managers’ Paul Pong, given that newly listed companies such asKuaishou TechnologyandJD Health International Inc. could win inclusion at a faster pace than before under the new requirement of 3 months of listing history.</li><li>Hong Kong’s local firms face a battle to preserve their weight in the index, with their number to be evaluated at least every two years. Goldman Sachs says the aggregate weighting of local firms could fall from 40% to 32%, as mainland firms’ weighting increases.</li><li>Potential deletions includeBank Of Communications Co.,China Life Insurance Co.,WH GroupandHengan International Group, according to Smartkarma.</li><li>“The biggest losers probably would be in finance or banking sectors, as they are the heaviest constituent stocks in Hang Seng index now,” said Edison Pun, senior market analyst at Saxo Markets Hong Kong. “With the adjustment, their importance would be greatly reduced.”</li></ul>","source":"lsy1584095487587","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>These Are the Winners and Losers of the Hang Seng Index Revamp</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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The revamp also shortens the listing history requirement for a company to be included. Implementation of the changes will begin as early as the May index review and go through mid-2022.WinnersFirms that are secondary-listed or carry unequal voting rights, includingAlibaba Group Holding Ltd., Xiaomi Corp. and Meituan, will no longer be limited to 5% weightings on the index.Consumer and health-care related stocks would see their sector weightings increase by 4 percentage points and 3 percentage points respectively at the expense of the financial sector, according to a research note by Goldman Sachs strategists including Si Fu.The revamp is seen as good news for ETF providers, as more funds are expected to be lured to track the index. Goldman expects passive funds tracking the gauge to grow to $25 billion from the current $20 billion, “providing scope to bring additional inflows to all the index constituents.”A more diversified membership and a higher weight of new-economy stocks will help the index performance as a whole, according to fund managers.“As more new-economy firms join, the index is likely to test the level of 40,000 in the future,” said Paul Pong, managing director at Pegasus Fund Managers Ltd.LosersUnder the new weighting cap, stocks that currently have a larger presence on the index could face redemptions by the passive funds, which could affectTencent Holdings Ltd.,AIA Group Ltd.andHSBC Holdings Plc., according to CGS-CIMB Securities International Pte and Everbright Sun Hung Kai Co.Tencent could also potentially be pressured as the index opensup tomore Chinese technology firms, according to Pegasus Fund Managers’ Paul Pong, given that newly listed companies such asKuaishou TechnologyandJD Health International Inc. could win inclusion at a faster pace than before under the new requirement of 3 months of listing history.Hong Kong’s local firms face a battle to preserve their weight in the index, with their number to be evaluated at least every two years. Goldman Sachs says the aggregate weighting of local firms could fall from 40% to 32%, as mainland firms’ weighting increases.Potential deletions includeBank Of Communications Co.,China Life Insurance Co.,WH GroupandHengan International Group, according to Smartkarma.“The biggest losers probably would be in finance or banking sectors, as they are the heaviest constituent stocks in Hang Seng index now,” said Edison Pun, senior market analyst at Saxo Markets Hong Kong. “With the adjustment, their importance would be greatly reduced.”","news_type":1},"isVote":1,"tweetType":1,"viewCount":561,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":21,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}