People use their phones next to a display showing the stock numbers on the Hang Seng Index in Hong Kong on April 27, 2022. (DALE DE LA REY / AFP)
HONG KONG – Hang Seng Indexes Company on Monday launched the Hang Seng Stock Connect China Enterprises Index (HSCEA) – an extension of its widely-referenced Hang Seng China Enterprises Index.
We launched the HSCEA to serve as a comprehensive tracker of Chinese companies with a high degree of representativeness.
Daniel Wong, Chief Index Officer at Hang Seng Indexes Company
The HSCEA includes southbound stock connect-eligible HSCEI constituents and large-cap A-shares that are eligible for trading through the northbound stock connect.
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Among the five largest constituents, Moutai, Tencent, CATL and Meituan are listed on one of the mainland or Hong Kong stock exchanges. Only China Construction Bank is listed in both the Chinese mainland and Hong Kong.
The market capitalization of the HSCEA was over 25 trillion yuan (about US$3.6 trillion), presenting a high representation of overall Chinese stocks.
According to back-testing data, the HSCEA would have delivered a cumulative return of 12.6 percent since 2017.
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Daniel Wong, chief index officer at Hang Seng Indexes Company, said the continuing internationalization of the Chinese mainland's capital markets with increasing accessibility presents huge potential investment opportunities and more global investors are eyeing the A-shares market.
“We launched the HSCEA to serve as a comprehensive tracker of Chinese companies with a high degree of representativeness," said Wong.
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"We believe the HSCEA, in conjunction with our existing flagship index HSCEI, will help investors to embrace the expanding investment opportunities."