With the selection of the value list of Jinqilin listed companies in Hong Kong stock market opened, thousands of companies will compete fiercely for the eight Project Awards. Who is the most leading entrepreneur, such as Zhang Yong, Yu Liang, Wang Xing, Lei Jun, Xu Jiayin and Ding Lei.
Hang Seng Index Company issued a quarterly inspection announcement on the evening of August 14. Xiaomi group (, Alibaba (9988. HK) and Xiaomi group (9988. HK) were included in the Hang Seng Index and Hang Seng China enterprise index; Yao Ming bio (2269. HK) was included in the Hang Seng Index, while meituan review (3690. HK), which was also highly anticipated before, failed to enter the Hang Seng state-owned enterprise index.
in addition, Xinhe real estate (0083. HK), China Wangwang (0151. HK) and China Shenhua (1088. HK) were excluded from the Hang Seng index due to the lower ranking of the circulating market value, while Taikoo (0019. HK) and China Unicom (0762. HK) with lower weights were retained. Sinopharma Holdings (1099. HK), BYD (1211. HK) and CITIC Securities (6030. HK) were excluded from the HSI SOE index. The above transfer will take effect on September 7, 2020.
in terms of weight, Alibaba accounted for 5% of the Hang Seng Index, while Xiaomi group accounted for 2.59%. At the same time, Tencent Holdings’ weight was reduced from 11.67% to the upper limit of 10%, and the weight of HSBC Holdings (0005. HK) was reduced from 8.86% to 8.14%; in the Hang Seng state-owned enterprise index, the weights of Ali and meituan reached 5%, and Xiaomi accounted for 3.73%.
“the transfer of constituent stocks is good for the Hang Seng Index in the long run, and the subject matter included in the Hang Seng index may rise in the short term due to the impact of the event; in addition, the weight reduction may bring some negative effects to Tencent.” Futu securities analyst Huang Tiansheng told the Securities Times reporter.
in fact, although passive funds will not track their purchases until September 7, when the changes take effect, active funds can take actions first, and funds have been seen to keep chasing relevant stocks. Since the announcement of the consultation results by Hang Seng on May 18, meituan reviews have soared by 84%, Xiaomi group has increased by 28%, and Alibaba has also increased by 25%, far higher than the 6% increase of the Hang Seng Index in the same period.
when Alibaba was listed in Hong Kong last year, it issued 575 million shares, accounting for only 2.68% of the total share capital. Because Alibaba’s US shares and Hong Kong shares are interchangeable, Citibank, the depositor of its American Depository Receipts (ads), transferred 4.11 billion shares to Hong Kong shares, accounting for 19.22% of Ali’s total equity.
since May, Alibaba’s blue signal has attracted U.S. stock investors to switch to Hong Kong for trading, and the position center has gradually shifted eastward. According to the data of CCASS, Citi’s position has decreased by 1.79 billion shares in the nine months since Alibaba’s listing, and the decline of Citi’s position has accelerated significantly from May to July, with a cumulative decrease of 1.1 billion shares in three months. Based on the current stock price of HK $247, US investors have moved more than HK $440 billion.
Huang Tiansheng analyzed that as of July 31, the asset management of exchange traded products linked to the Hang Seng index was about 19.7 billion US dollars. It is estimated that meituan, Ali and Xiaomi will bring passive capital inflows of US $985 million, US $985 million and US $279 million respectively.
it is worth noting that due to the external environment in recent days, Hong Kong’s technology stocks fluctuated greatly. Since the US blocked a number of Chinese Internet companies on Thursday, the Hang Seng technology index fell more than 6% for four consecutive days, and slightly reversed on the 14th. Among them, Tencent has fallen by nearly 10% in total. Although the performance of the interim report is higher than expected, it still retrenches 2% after the release of the performance; Ali falls more than 4%.
although the constituent stocks of the Hang Seng index will be reviewed every quarter, this adjustment has attracted much attention due to the inclusion of shares with different rights in the same share and secondary listing for the first time. This is regarded as the biggest reform in the past 15 years since the inclusion of H shares in 2006.
in May this year, the Hang Seng Index Co., Ltd. consulted the index to include the second listed companies with different rights of the same share. The market response was positive, and more than 90% of the respondents expressed support. As a result, Hang Seng Index company has decided that in the future, the above-mentioned companies in China will be included in the stock selection category of Hang Seng Index and Hang Seng China enterprise index, and the upper limit of the proportion of individual constituent stocks in the index is set at 5%.
the Hang Seng Index company also said that it would not make any changes to the current positioning of the Hang Seng Index; it would not impose any restrictions on the proportion or proportion of Hong Kong and mainland component stocks and financial stocks in the Hang Seng Index; market representativeness would still be the main consideration for the changes in the constituent stocks of the Hang Seng Index.
the Hang Seng index was launched in 1969. At present, there are 50 constituent stocks, including H shares and red chips, which are listed in Hong Kong with the largest market value and the most active transactions. Since its launch more than 50 years ago, the Hang Seng Index has become an important indicator to reflect the performance of relevant stock markets.
before that, the market performance and representativeness of the Hang Seng index were often criticized. Yan Zhaojun, an international strategic analyst with China and Thailand, said that the proportion of the constituent stocks of the Hang Seng Index belonging to the traditional economy is too high, and it is difficult to truly and comprehensively reflect the economic operation of Hong Kong and the mainland. Too many enterprises lack of growth power, to some extent, lead to the long-term undervalued state of the Hang Seng Index.
according to the statistics of the Hang Seng Index, as of June 2020, the weight of financial sector in the constituent stocks of the Hang Seng index was as high as 50.1%; according to wind data, the financial weights of the S & P 500, NASDAQ, Nikkei and Shanghai Stock Index were 9.1%, 4.1%, 9.6% and 28%, respectively, which were lower than those of the Hang Seng Index. In addition, 11 real estate components accounted for 10.24% of the weight.
Tencent is the only giant in the information technology sector of the Hang Seng Index, accounting for 11.36%, while other technology companies such as sunny optical technology and Raytheon technology account for a small proportion. In the top 20 component stock market value ranking, except Tencent, they are all enterprises in traditional industries such as banking, energy and real estate.
according to Zhang Yidong, a strategic analyst of Societe Generale Securities, the performance of the Hang Seng index is in great contrast to the new economic structural market of Hong Kong stocks. Since the beginning of 2019, the Hang Seng information technology industry, health care industry and essential consumer industry have launched a vigorous market, rising 65%, 75% and 34% respectively, with many big bull stocks. However, the Hang Seng Index fell by 2.8% due to the heavy weight of financial real estate.
after the adjustment, the financial sector of the Hang Seng index remained unchanged, with 11 constituent stocks, with the weight reduced from 49.03% to 45.47%; the real estate sector decreased by 1, Xinhe real estate, with the weight reduced from 10.13% to 8.89%; the industrial and commercial sector increased from 36.61% to 41.64%.
Huang Tiansheng said that the addition of Ali and other technology stocks will inject more scientific and technological components, improve the valuation level of high-quality technology core assets in Hong Kong stocks, help to solve the lack of representativeness of the index, and better reflect the actual operation of the overall Hong Kong stock market.
as early as 2014, the Hong Kong Stock Exchange lost the IPO opportunity of Alibaba because it was unable to accept the same share with different rights structure. Since then, the Hong Kong Stock Exchange has made great efforts to promote the reform of the listing system. In 2018, the rules were revised to include companies with different ownership structures, non-profit or non income biomedical companies, and companies in Greater China that are listed twice.
this round of reform has achieved remarkable results in improving the overall market value structure of Hong Kong stocks, and the technology industry has shown a leading trend. In the second quarter of 2020, the market value of science and technology industry in Hong Kong stock market has risen to 35%, while that of finance industry is only 17%.
Hong Kong stock listed members have also added a lot of new blood. As of April 2020, Hong Kong has attracted 84 new economy companies to be listed in Hong Kong stock market, raising HK $302.3 billion, accounting for 50.8% of the total amount raised by Hong Kong stocks in the past two years, and the proportion of new economy companies in the value of Hong Kong stock market has increased to 17%.
in addition, Hong Kong has attracted 28 medical, health and biotechnology companies to be listed in Hong Kong. Among them, 16 have no income and raised HK $39.7 billion, accounting for 6.7% of the total financing in Hong Kong’s new stock market in the same period. There are also a number of medical and biological companies queuing up. As a result, Hong Kong has grown into the second largest biotechnology financing center in the world.
Hang Seng technology index, known as “Hong Kong Na index”, was subsequently launched. Under the criteria of selected industries, technology themes and innovation considerations, 30 stocks with the largest market value were selected and included in the constituent stocks. Among them, Alibaba, Tencent, meituan Dianping and Xiaomi group ranked the top. These four companies are often referred to as “atmx” in the financial market of Hong Kong.
“the new technology index is very popular. We have received a number of inquiries from exchange traded funds (ETFs), warrants and other derivatives issuers for authorization of new index creation products. ” Huang Weixiong, head of research and analysis at Hang Seng Index, said.
it is worth mentioning that hang seng index published a blog entitled “Hong Kong’s science and technology dream” on July 30, which showed the positive attitude of the Hong Kong stock market towards the new economic wave. According to the blog, the technology sector is no longer limited to traditional hardware and software companies. More and more enterprises are using the Internet or mobile communication platforms to improve customer experience. As the market’s awareness of the technology sector continues to update, we can expect that more businesses will be regarded as atmx like stocks.
the stock price of the Hong Kong Stock Exchange (0388. HK) also showed positive performance, with a 47% increase this year.
on the other side of the ocean, affected by the Sino US friction and the earlier Ruixing thunderstorm and other events, China concept shares are cold in the United States, and the market is expected to usher in a new wave of return of China concept stocks in the future.
recently, the US president’s financial market working group (PWG) reported that it would improve the listing standards of Chinese enterprises going to the United States, and at the same time, require Chinese enterprises that have already listed to enhance audit transparency.
prior to this, the US Senate also passed the foreign company control responsibility act, which stipulates that if listed companies in the United States fail to meet the audit requirements of PCAOB for three consecutive years, they will be prohibited from trading, and require us stock companies to disclose whether they are owned or controlled by foreign governments.
the Hong Kong stock exchange offered olive branches to China capital stock exchange. Last month, in response to the official announcement of the listing of ant group, Li Xiaojia, chief executive of the Hong Kong stock exchange group, said: “ant group has chosen to apply for listing on the Hong Kong stock exchange, affirming Hong Kong’s position as the world’s leading new share raising market. We will continue to open our arms and welcome global innovative and leading companies to list in Hong Kong. ”
recently, Netease (9999. HK) and Jingdong (9618. HK) have been listed twice in Hong Kong, while Baidu, BiliBili, iqiyi and vipshop have been rumored to return to Hong Kong shares.
other companies have gone against the current and still choose us stocks as their listing destinations. BEKE. N, an Internet real estate agency, has just landed on the NYSE with an offering price of $20 / ads and an opening price of $35, up 75% from the offering price. By the end of the day, it is up 87.2%, with a market value of $42.2 billion. In addition, China’s electric car maker Xiaopeng has submitted an application to the US Securities Regulatory Commission for listing.
there are still some companies sticking to their positions. When asked about the possibility of delisting at the second quarter financial report, ye zhuodong, CEO of Tencent music (TME. N), said that it was too early to speculate about the possibility of delisting from the US stock market at present. Delisting is not the only choice for the company, “we can choose to have joint audit by the US audit institution.”
the company will still make differentiated selection of listing destination according to its own situation. “Chinese enterprises do have some fear of going to the United States for listing, but I believe that those enterprises with no financial defects and sufficient quality will still choose to go to the United States for listing. After all, the international U.S. capital market has many advantages.” Huang Tiansheng said.
for China capital stocks that are likely to seek secondary listing or re listing, Huaxing securities is the chief economic officer