The goal is to increase the number of constituent stocks to 80 by mid-2022, with the final number fixed at 100. The listing history requirement will be shortened to three months.
On Monday, March 1, Hang Seng Indexes Company Limited announced the results of the Hang Seng Index consultation. This signifies the largest adjustment the index has ever faced.
This index reform will take effect starting from the May 2021 index review.
According to the consultation results, the reform aims to increase the number of Hang Seng Index constituents to 80 by mid-2022, with a final fixed number of 100. Additionally, the listing history requirement will be shortened to three months.
In terms of key content, the reform calls for expanding the market coverage of the Hang Seng Index. The goal is to increase the number of constituent stocks to 80 by mid-2022, with the final number fixed at 100.
It also requires enhancing industry representation. Component stocks will be selected based on seven industry groups, which will be reviewed at least every two years. This change will take effect starting from the May 2021 index review.
Regarding listing requirements, the history requirement will be shortened to three months, effective starting from the May 2021 index review.
To maintain Hong Kong companies' representation, the Hang Seng Index will retain 20 to 25 Hong Kong company constituent stocks. The number of Hong Kong company constituents will be evaluated at least every two years.
The weighting of companies will also change to improve the weight distribution of constituent stocks. An 8% cap on the weight of all constituent stocks will be applied, and this also applies to the Hang Seng China Enterprises Index. This will take effect starting from the June 2021 index adjustment.