Hong Kong stock index compiler leaves blue chip Hang Seng benchmark unchanged in latest quarterly review

Hong Kong stock index compiler leaves blue chip Hang Seng benchmark unchanged in latest quarterly review

16 Feb Hong Kong stock index compiler leaves blue chip Hang Seng benchmark unchanged in latest quarterly review

Posted at 12:10h in Asia by

However, the city’s battered market has hurt the index compiler’s ambitions of hitting the target any time soon as investor sentiment remains weak because of the ongoing slowdown in China following the post-Covid reopening, and deflation has become more entrenched leading to a contraction in consumer and producer prices.

The Hang Seng Index fell about 14 per cent in 2023, capping an unprecedented four-year losing streak, while the gauge has lost nearly 3 per cent so far this year.

Chinese authorities have had to intervene in the market, via verbal support and state fund buying, to shore up financial markets at home after a rout that has erased more than US$1 trillion of value in Hong Kong, Shanghai and Shenzhen over the past three years.

Hong Kong stocks could see a turnaround after the market logged the biggest jump in almost two weeks on Friday. It came after reports showed some fund managers had turned upbeat on China’s biggest technology companies amid falling valuations.

Meanwhile, the Hang Seng Stock Connect China Enterprises Index, which tracks the overall performance of Chinese companies listed in Hong Kong and mainland China that are eligible for the Stock Connect scheme, saw the addition of telecommunications company China Unicom and home-appliance maker Midea Group.

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Shares of China Unicom rose 1.1 per cent to HK$5.37 on Friday before the quarterly review was announced, and have gained 13 per cent year to date. Midea last traded at 60.29 yuan, with its shares up 10 per cent year to date. The mainland’s markets are closed for the Lunar New Year holiday.

Midea is expected to undertake an initial public offering in Hong Kong later this year that could raise as much as US$1 billion.

Car dealer Zhongsheng Group Holdings and new energy company Tongwei were removed. The index constituents remained at 80. All changes will be effective from March 4.

The Hang Seng Index, which was launched in 1969, had a market capitalisation of HK$28.1 trillion (US$3.6 trillion) at the end of January, according to exchange data.

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