Edited by Anxin International: "potential New Jin Hong Kong Stock Exchange shares-2018 Review Forecast"
Summary:
1. After the market closes on February 8, 2019, the Hang Seng Index Company will announce the results of the annual review of the Hang Seng Composite Index. The relevant changes will take effect after the market closes on March 1.
2. The Hong Kong Stock Connect list is based on the Hang Seng Composite Index large and medium stocks + small caps with an average market capitalization of more than HK $5 billion + non-ST shares-REIT-shares with different rights (W shares)-Foreign companies-bound Securities (SS Securities).
3. The membership change of the Hang Seng Composite Index will lead to the change of the Hong Kong Stock Connect share list, while the change of the Hong Kong Stock Connect list has attracted the attention of the market. Anxin International forecasts the relevant changes in the trading data from January to December 2018.
1. Screening principle
The Hang Seng Composite Index is designed to cover the top 95% of the total market capitalization of securities listed on the main board of the Hong Kong Stock Exchange. in the course of the review, the index companies have established the following buffer principles:
To enter the index, the market capitalization of non-constituent companies needs to be in the top 94% of the market, and the existing component stock market value needs to be in the top 96% of the market (that is, falling out of the first 96% of the market capitalization will be removed).
As of December 18, the average market capitalization of the motherboard at the end of January to December was HK $32.8 trillion, down just 1.1 per cent from HK $33.2 trillion at the end of June. At present, there are about 1930 stocks on the main board, with a total market capitalization threshold of HK $6.1 billion, HK $4.77 billion and HK $3.63 billion, respectively, according to Anson International. That is:
This annual reviewFor non-constituent stocks to enter the Hang Seng Composite Index, their average market capitalization is higher than HK $6.1 billion (94% threshold).Above the market capitalization threshold of Hong Kong Stock Exchange (HK $5 billion).At present, if constituent stocks are to be kicked out of the Hang Seng Composite Index, their average market capitalization will be less than HK $3.63 billion..
2. Screening results
ForecastThere are 18 shares with a high probability of becoming the general standard of new Hong Kong stocks.:
Source: Anxin International Forecast
In particular, it is pointed out that: 1) INNOVENT BIO Pharmaceuticals and Golly Pharmaceuticals are biotech sector shares, the Hang Seng Index has not indicated that the Hang Seng Composite Index cannot include biotechnology sector shares, and the Shanghai and Shenzhen exchanges have not indicated that such stocks will not be allowed to enter the Hong Kong Stock Connect. Therefore, Anxin International believes that such shares can be included in the Hang Seng Composite Index and Hong Kong Stock Connect list; 2) Foreign Exchange Technology is newly listed in December and its market capitalization is on the edge, so it may not be able to enter the Hang Seng Composite Index.
In the general standard of potential Xinjin Hong Kong sharesAnxin International recommended attention:Tianlun gas、INNOVENT BIO、With Cheng Yilong、Baby tree、AsiaInformation TechnologyWait.
It is estimated that 20 shares will be removed from the Hong Kong Stock Connect list:
Source: Bloomberg, Anxin International Forecast
Attached picture:Detection of two major indicators of potential Xinjin-Hong Kong Stock Connect and valuation of related shares
Source: Bloomberg, Anxin International
Source: Anxin International, Bloomberg