Hang Seng Index
Encyclopedia
The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index
in Hong Kong
. It is used to record and monitor daily changes of the largest companies of the Hong Kong stock market
and is the main indicator of the overall market performance in Hong Kong. These 45 constituent companies represent about 60% of capitalisation of the Hong Kong Stock Exchange.
Since 7th March, 2011, the HKEX extended their trading hours. In the first stage, (opening value will be at 09:20) 09.30-12.00 and 13.30-16.00. In the second stage, from 5th March 2012, the afternoon trade will change to 13.00-16.00, that's mark with the mainland trading hours.
HSI was started on November 24, 1969, and is currently compiled and maintained by Hang Seng Indexes Company Limited, which is a wholly owned subsidiary of Hang Seng Bank
, one of the largest banks registered and listed in Hong Kong in terms of market capitalisation. It is responsible for compiling, publishing and managing the Hang Seng Index and a range of other stock indexes, such as Hang Seng China Enterprises Index, Hang Seng China AH Index Series, Hang Seng China H-Financials Index, Hang Seng Composite Index Series, Hang Seng China A Industry Top Index, Hang Seng Corporate Sustainability Index Series and Hang Seng Total Return Index Series.
Hang Seng Finance Sub-index
Hang Seng Utilities Sub-index
Hang Seng Properties Sub-index
Hang Seng Commerce & Industry Sub-index
In the future, the number of constituent stocks will be increased to 50 in order to reflect the changes in the Hong Kong stock market and to maintain the index as the most representative market benchmark.
The Hang Seng Composite Index Series
(恒生綜合指數) was launched on October 3, 2001, targeting on providing a broad standard of the performance of the Hong Kong stock market. It was last revamped on March 8, 2010, and comprises 307 constituents (will become 306 from August 9, 2010). The market capitalisation of these companies accounts for about 95% of the total capitalisation of the stocks in Hong Kong.
To ensure the impartiality of its operation, Hang Seng Indexes Company Limited established an Independent Advisory Committee to give advice on issues pertaining to the indexes, including constituent changes and the development of new indexes.
General classification guidelines:
i) The sales revenue arising from each business area of a company is the primary parameter of stock classification. Profit or assets will also be taken into consideration where these better reflects the company's business.
ii) A company will be classified into different sectors according to its majority source of sales revenue(or profit or assets if relevant).
iii) Re-classification of a stock's Industry Sector will occur once the company's business has undergone a major change, such as, substantial merger or acquisition
.
Industry sectors:
Source of information
The classification of each stock is based on the information available to the public, for example the annual reports and company announcements.
Guidelines for Handling Large-cap Stocks Listed for Less than 24 Months
For a newly listed large-cap stock, the minimum listing time required for inclusion in the stock universe for the HSI review is as follows:
Among the eligible candidates, final selections are based on their:
Descriptions on parameters:
Stock market index
A stock market index is a method of measuring a section of the stock market. Many indices are cited by news or financial services firms and are used as benchmarks, to measure the performance of portfolios such as mutual funds....
in Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
. It is used to record and monitor daily changes of the largest companies of the Hong Kong stock market
Hong Kong Stock Exchange
The Hong Kong Stock Exchange is a stock exchange located in Hong Kong. It is Asia's third largest stock exchange in terms of market capitalization behind the Tokyo Stock Exchange and the Shanghai Stock Exchange and fifth largest in the world...
and is the main indicator of the overall market performance in Hong Kong. These 45 constituent companies represent about 60% of capitalisation of the Hong Kong Stock Exchange.
Since 7th March, 2011, the HKEX extended their trading hours. In the first stage, (opening value will be at 09:20) 09.30-12.00 and 13.30-16.00. In the second stage, from 5th March 2012, the afternoon trade will change to 13.00-16.00, that's mark with the mainland trading hours.
HSI was started on November 24, 1969, and is currently compiled and maintained by Hang Seng Indexes Company Limited, which is a wholly owned subsidiary of Hang Seng Bank
Hang Seng Bank
Hang Seng Bank Limited is the second largest bank in Hong Kong. It is a listed company but it is majority owned by the HSBC Group via The Hongkong and Shanghai Banking Corporation. Hang Seng is also one of the constituent shares of the Hang Seng Index...
, one of the largest banks registered and listed in Hong Kong in terms of market capitalisation. It is responsible for compiling, publishing and managing the Hang Seng Index and a range of other stock indexes, such as Hang Seng China Enterprises Index, Hang Seng China AH Index Series, Hang Seng China H-Financials Index, Hang Seng Composite Index Series, Hang Seng China A Industry Top Index, Hang Seng Corporate Sustainability Index Series and Hang Seng Total Return Index Series.
Statistics
When the Hang Seng Index was first published, its base of 100 points was set equivalent to the stocks' total value as of the market close on July 31, 1964. Its all-time low is 58.61 points, reached retroactively on August 31, 1967, after the base value was established but before the publication of the index. The Hang Seng passed the 10,000 point milestone for the first time in its history on December 10, 1993 and, 13 years later, passed the 20,000 point milestone on December 28, 2006. In less than 10 months, it passed the 30,000 point milestone on October 18, 2007. Its all-time high, set on October 30, 2007, was 31,958.41 points during trading and 31,638.22 points at closing. From October 30, 2007 through March 9, 2008, the index lost 9,426 points or approximately 30%. On September 5, it fell past the 20,000 mark the first time in almost a year to a low of 19,708.39, later closing at 19,933.28. On October 8, 2008, the index closed at 15,431.73, over 50% less than the all-time high and the lowest closing value in over two years. On October 27, 2008, the index further fell to 10,676.29 points, having fallen nearly two-thirds from its all-time peak, but passed the 20,000 point milestone again to 20,063.93 on 24 July 2009. As of the 4th of October, 2011, the index is hovering around 16,000 to 17,000 points.Components
On January 2, 1985, four sub-indices were established in order to make the index clearer and to classify constituent stocks into four distinct sectors. There are 45 HSI constituent stocks in total. As of September 6, 2010, they are:Hang Seng Finance Sub-index
- 0005 HSBC Holdings plc
- 0011 Hang Seng Bank Ltd
- 0023 Bank of East Asia, LtdBank of East AsiaThe Bank of East Asia Limited often abbreviated to BEA, is the largest independent local bank and the third largest bank in Hong Kong. Its chairman and chief executive is Sir David Li...
- 0388 HKEx LimitedHong Kong Exchanges and ClearingHong Kong Exchanges and Clearing Limited , also 香港交易所 or 港交所; abbreviated as HKEx; ) is the holding company for The Stock Exchange of Hong Kong Limited , Hong Kong Futures Exchange Limited and Hong Kong Securities Clearing Company Limited...
- 0939 China Construction BankChina Construction BankChina Construction Bank is one of the 'big four' banks in the People's Republic of China. To date, it is ranked as the nation's second largest and the second largest bank in the world by market capitalization and 12th largest company in the world. The bank has approximately 13,629 domestic branches...
- 1299 American International AssuranceAmerican International AssuranceAmerican International Assurance known as AIA is an insurance company based in Hong Kong. It has offices in Asia-Pacific region including Taiwan, China, Australia, New Zealand, Japan, India, Malaysia, Macau, South Korea, Thailand, Philippines, Singapore, Brunei and Vietnam...
- 1398 Industrial and Commercial Bank of ChinaIndustrial and Commercial Bank of ChinaIndustrial and Commercial Bank of China Ltd. is the largest bank in the world by profit and market capitalization. It is one China's 'Big Four' state-owned commercial banks .It was founded as a limited company on January 1, 1984...
- 2318 Ping An InsurancePing An InsurancePing An , full name Ping An Insurance Company of China, Ltd. is a holding company whose subsidiaries mainly deal with insurance and financial services. The company was founded in 1988 and has its headquarters in Shenzhen.-Business:...
- 2388 BOC Hong Kong (Holdings) LtdBank of China (Hong Kong)Bank of China Limited is the second-largest commercial banking group in Hong Kong in terms of assets and customer deposits, with more than 300 branches in Hong Kong. It was established on 1 October 2001 from a merger of 12 subsidiaries and associates of the Bank of China in Hong Kong, and listed...
- 2628 China LifeChina Life Insurance CompanyThe China Life Insurance Company Limited is a Beijing-based China-incorporated company that provides life insurance and annuity products.-History:...
- 3328 Bank of Communications LtdBank of CommunicationsBank of Communications Limited , founded in 1908, is one of the largest banks in China.-Before 1949:The Bank of Communications was founded in 1908 and emerged as one of the first few major national and note-issuing banks in the early days of the Republic of China...
- 3988 Bank of China LtdBank of ChinaBank of China Limited is one of the big four state-owned commercial banks of the People's Republic of China. It was founded in 1912 by the Government of the Republic of China, to replace the Government Bank of Imperial China. It is the oldest bank in China...
Hang Seng Utilities Sub-index
- 0002 CLP Holdings Ltd
- 0003 Hong Kong and China Gas Company Limited
- 0006 Hong Kong Electric Holdings LtdHongkong ElectricPower Assets Holdings Limited is a vertically integrated electric utility company. Its subsidiary Hongkong Electric Company was the first company to provide electricity in Hong Kong. The service has been running in continuation since the 19th century...
- 0836 China Resources PowerChina Resources PowerChina Resources Power Holdings Company Limited , or China Resources Power, was incorporated and registered in Hong Kong in 2001. It is a subsidiary of China Resources Holdings, a conglomerate in Mainland China and Hong Kong...
Hang Seng Properties Sub-index
- 0001 Cheung Kong (Holdings) Ltd
- 0012 Henderson Land Development Co. Ltd
- 0016 Sun Hung Kai Properties Ltd
- 0083 Sino Land Co LtdSino GroupSino Group is one of the largest property companies in Hong Kong. The Group comprises private holding companies owned by the Ng family, and three publicly listed companies:*Tsim Sha Tsui Properties Limited*Sino Land Company Limited...
- 0101 Hang Lung Properties Ltd
- 0688 China Overseas Land & Investment Limited
- 1109 China Resources Land Limited
Hang Seng Commerce & Industry Sub-index
- 0004 Wharf (Holdings) Ltd
- 0013 Hutchison Whampoa Ltd
- 0017 New World Development Co. Ltd.
- 0019 Swire Pacific Ltd 'A'Swire GroupThe Swire Group is a transnational corporation headquartered in the Swire House in the City of Westminster, London, England. It controls a range of wholly owned businesses, including deep-sea shipping, cold storage, road transport, and agricultural activities. The current chairman is James...
- 0066 MTR Corporation LtdMTR CorporationMTR Corporation Limited is a company listed on the Hong Kong Exchange and included in the Hang Seng Index. MTR owns and runs the Hong Kong MTR metro system, and is also a major property developer and landlord in Hong Kong...
- 0144 China Merchants Holdings (International) Co Ltd
- 0267 CITIC Pacific Ltd
- 0291 China Resources Enterprise, LtdChina ResourcesChina Resources is a group of companies in a wide variety of businesses in Hong Kong and mainland China. Some of its companies use the name in the form of the acronym CRC....
- 0293 Cathay Pacific Airways Ltd
- 0330 Esprit Holdings Ltd
- 0386 Sinopec CorpSinopecChina Petroleum & Chemical Corporation Limited , or Sinopec Limited , is a majority owned subsidiary of state owned company Sinopec Group. Sinopec Limited is listed in Hong Kong and also trades in Shanghai and New York ....
- 0494 Li & Fung LtdLi & FungLi & Fung Limited is a global trading group, based in Hong Kong, that supplies high-volume, time-sensitive consumer goods. Garments make up around two-thirds of the Li & Fung business which also covers the sourcing of hardgoods such as fashion accessories, furnishings, gifts, handicrafts, home...
- 0700 Tencent Holdings Limited
- 0762 China Unicom LtdChina UnicomChina Unicom or China United Netcom Ltd , is a Chinese state-owned telecommunications operator in the People's Republic of China.-History:...
- 0857 PetroChina Company LimitedPetroChinaPetroChina Company Limited is a Chinese oil company and is the listed arm of state-owned China National Petroleum Corporation , headquartered in Dongcheng District, Beijing. It is China's biggest oil producer, and was the world's most valuable company by market value as of September 28th 2010...
- 0883 CNOOC Ltd
- 0941 China Mobile LtdChina MobileChina Mobile Limited is a Chinese state-owned telecommunication company that provides mobile voice and multimedia services through its nationwide mobile telecommunications network, the largest of its kind in the world...
- 1088 China Shenhua Energy Company Limited
- 1199 COSCO Pacific LtdCOSCOChina Ocean Shipping Company, known as COSCO or COSCO Group, is one of the largest liner shipping companies worldwide. It is a government owned company of the People's Republic of China...
- 1880 Belle InternationalBelle InternationalBelle International Holdings Limited is the No. 1 woman's shoe retailer in the People's Republic of China, with 22% domestic market share. It is engaged in the manufacturing, distribution and retail sales of footwear products...
- 1898 China Coal EnergyChina Coal Energy CompanyThe China Coal Energy Company Limited , is the second largest coal mining state-owned enterprise in Mainland China, just after China Shenhua Energy Company, and the third largest coal mining enterprise in the world...
- 2600 Aluminum Corporation of China Limited (Chalco)
In the future, the number of constituent stocks will be increased to 50 in order to reflect the changes in the Hong Kong stock market and to maintain the index as the most representative market benchmark.
The Hang Seng Composite Index Series
Hang Seng Composite Index Series
The Hang Seng Composite Index Series includes the following:*Hang Seng Hong Kong Composite Index **Hang Seng HK LargeCap Index **Hang Seng HK MidCap Index **Hang Seng HK SmallCap Index...
(恒生綜合指數) was launched on October 3, 2001, targeting on providing a broad standard of the performance of the Hong Kong stock market. It was last revamped on March 8, 2010, and comprises 307 constituents (will become 306 from August 9, 2010). The market capitalisation of these companies accounts for about 95% of the total capitalisation of the stocks in Hong Kong.
To ensure the impartiality of its operation, Hang Seng Indexes Company Limited established an Independent Advisory Committee to give advice on issues pertaining to the indexes, including constituent changes and the development of new indexes.
Hang Seng Industry Classification System
Hang Seng Industry Classification System (formerly called Hang Seng Stock Classification System) is a comprehensive system designed for the Hong Kong stock market by Hang Seng Indexes Company Limited. It reflects the stock performance in different sectors. It caters for the unique characteristics of the Hong Kong stock market and maintains the international compatibility with a mapping to international industry classificationGeneral classification guidelines:
i) The sales revenue arising from each business area of a company is the primary parameter of stock classification. Profit or assets will also be taken into consideration where these better reflects the company's business.
ii) A company will be classified into different sectors according to its majority source of sales revenue(or profit or assets if relevant).
iii) Re-classification of a stock's Industry Sector will occur once the company's business has undergone a major change, such as, substantial merger or acquisition
Takeover
In business, a takeover is the purchase of one company by another . In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to the acquisition of a private company.- Friendly takeovers :Before a bidder makes an offer for another...
.
Industry sectors:
- Energy (能源業)
- Material (源材料業)
- Industrial Goods (工業製品業)
- Consumer Goods (消費品製造業)
- Services (服務業)
- Telecommunications (電訊業)
- Utilities (公共事業)
- Financials (金融業)
- Properties & Construction (地產建築業)
- Information Technology (資訊科技業)
- Conglomerates (綜合企業)
Source of information
The classification of each stock is based on the information available to the public, for example the annual reports and company announcements.
Selection criteria for the HSI constituent stocks
HSI constituent stocks are selected with the use of extensive analysis, together with external consultation. To be qualified for selection, a company:- must be among those that comprise top 90% of the total market value of all ordinary shares;
- must be among those that comprise top 90% of the total turnover on the Stock Exchange of Hong Kong Limited "SEHK" (香港交易所);
- should have a listing history of 24 months or meet the requirements of the following Guidelines:
Guidelines for Handling Large-cap Stocks Listed for Less than 24 Months
For a newly listed large-cap stock, the minimum listing time required for inclusion in the stock universe for the HSI review is as follows:
| Average MV Rank at Time of Review | Minimum Listing History |
|---|---|
| Top 5 | 3 Months |
| 6–15 | 6 Months |
| 16–20 | 12 Months |
| 21–25 | 18 Months |
| Below 25 | 24 Months |
Among the eligible candidates, final selections are based on their:
- market capitalisation and turnover rankings;
- representation of the respective sub-sectors within HSI; and
- financial performance.
Calculation formula for HSI
The current Hang Seng Index is calculated from this formula:Descriptions on parameters:
- P(t)：Current Price at Day t
- P(t-1)：Closing Price at Day (t-1)
- IS：Issued Shares (Only H-share portion is taken into calculation in case of H-share constituents.)
- FAF：Freefloat-adjusted Factor, which is between 0 and 1, adjusted quarterly
- CF：Cap Factor, which is between 0 and 1, adjusted quarterly
Daily reports for HSI
Investors in Asian markets monitor the following reports for investment activities:- Hang Seng Indexes Daily Bulletin
- Hang Seng Index (HSI) Constituent Stocks Performance
- Index Performance Summary
- Total Return Index Series Daily Bulletin
Representativeness of the HSI
The representativeness of the HSI can be studied by the turnover of the whole stock market and by how much its market capitalisation covers. The aggregate market value of the HSI constituent stocks is maintained at approximately 60% of the total market value. This coverage ratio compares favorably with major overseas stock indices.Other related Hang Seng stock indexes
- Hang Seng China Enterprises Index (恒生中國企業指數)
- Hang Seng China-Affiliated Corporations Index (恒生香港中資企業指數)
- Hang Seng China H-Financials Index (恒生中國H股金融行業指數)
- Hang Seng Mainland 100 (恒生中國內地100)
- Hang Seng Mainland 25 (恒生中國內地25)
- Hang Seng HK 35 (恒生香港35)
- Hang Seng REIT Index (恒生房地產基金指數)
- Hang Seng Corporate Sustainability Index Series (恒生可持續發展企業指數系列)
- Hang Seng Composite Index (恒生綜合指數系列)
- Hang Seng Composite Industry Indexes (恒生綜合行業指數)
- Hang Seng Composite Size Indexes (恒生綜合市值指數)
- Hang Seng Short & Leveraged Index Series (恒生短倉及槓桿指數系列)
- Hang Seng China A Industry Top Index (恒生A股行業龍頭指數)
- Hang Seng China 50 Index (恒生神州50指數)
- Hang Seng China AH Premium Index(恒生AH股溢價指數)
- Hang Seng China AH Index Series (恒生AH指數系列)
- Hang Seng Total Return Index Series (恒生股息累計指數系列)
- Hang Seng Dividend Point Index Series (股息點指數系列)
See also
- SSE Composite Index
- SSE Component Index
- Taiwan Capitalization Weighted Stock IndexTaiwan Capitalization Weighted Stock IndexTaiwan Capitalization Weighted Stock Index is a stock market index for companies traded on the Taiwan Stock Exchange . TAIEX covers all of the listed stocks excluding preferred stocks, full-delivery stocks and newly listed stocks, which are listed for less than one calendar month...