On March 27, the Hang Seng Index Company announced two indices related to Technology, namely the Hang Seng Tech Index 10 and the Hang Seng China Technology 10 Select Index.
It is notable that the performance of Hong Kong tech stocks has been overall very strong this year, symbolizing the trend of tech stocks. $Hang Seng TECH Index (800700.HK)$ The highest increase this year has exceeded 35%, far outpacing the three major indices of the USA.
Futu has compiled the constituent stocks of these 2 new indices for mooers' reference:
Hang Seng TECH Index Top 10
This index reflects the performance of the largest 10 constituent companies in the Hang Seng TECH Index. Currently includes: $XIAOMI-W (01810.HK)$ 、 $TENCENT (00700.HK)$ 、 $BABA-W (09988.HK)$ 、 $MEITUAN-W (03690.HK)$ 、 $JD-SW (09618.HK)$ 、 $KUAISHOU-W (01024.HK)$ 、 $LI AUTO-W (02015.HK)$ 、 $NTES-S (09999.HK)$ 、 $TRIP.COM-S (09961.HK)$ 、 $BIDU-SW (09888.HK)$ 。
In terms of adjustments to constituents, the Hang Seng TECH Index Top 10 Index has set up a buffer zone, with existing constituents ranked below 12 in the Hang Seng TECH Index being excluded from the Hang Seng TECH Index Top 10 Index, while securities ranked 8 and above will be added to this Index; ultimately, the number of constituents removed and the number of new securities added to the Hang Seng TECH Index Top 10 Index will be determined by Market Cap ranking, maintaining the number of constituents at 10.
Hang Seng Top 10 Selected Index for Chinese Technology.
This Index reflects the performance of the 10 largest companies listed in Hong Kong or mainland China that are related to selected technology businesses. Currently, this Index includes $XIAOMI-W (01810.HK)$ 、 $TENCENT (00700.HK)$ 、 $BABA-W (09988.HK)$ 、 $MEITUAN-W (03690.HK)$ 、 $JD-SW (09618.HK)$ 、 $SMIC (00981.HK)$ 、 $KUAISHOU-W (01024.HK)$ 、 $NAURA Technology Group (002371.SZ)$ 、 $NTES-S (09999.HK)$ 、 $BIDU-SW (09888.HK)$ 。
The selection range of the Hang Seng China Technology Top 10 Index is$Hang Seng Composite LargeCap Index (800714.HK)$and$Hang Seng Stock Connect China A 300 Index (800736.HK)$components, with regional requirements that they must be A-shares or mainland securities listed in Hong Kong. In terms of liquidity, the Hang Seng China Technology Top 10 Index also has requirements, requiring a 6-month average daily trading volume of at least 20 million yuan (A-shares) / 20 million Hong Kong dollars (Hong Kong stocks).
Regarding foreign ownership ratio requirements for existing constituents of the Hang Seng China Technology Top 10 Index (only applicable to A-shares), A-shares with foreign ownership exceeding 26% will be excluded; for non-existing constituents, A-shares with foreign ownership exceeding 24% will be excluded. Additionally, there are also related requirements regarding the Industry for this index.
In the selection method for constituents, the 10 securities with the highest market capitalization in the Hang Seng China Technology Top 10 Index will be selected as constituents. If A-shares and Hong Kong stocks of the same company listed in both markets are eligible securities, the constituent with the higher 6-month average daily trading volume will be chosen, with the number of constituents fixed at 10. The base date for this index is December 31, 2021, with a base value of 3000 points.
What do foreign investment banks think?
After the Lunar New Year holiday, the Chinese stock market has re-entered the investors' sight.
Goldman Sachs pointed out that with the emergence of DeepSeek changing the narrative of Chinese technology stocks and the government's supportive attitude towards private enterprises, global funds are returning to China, and this increase is more sustainable than previous ones.
JPMorgan also predicts that the Chinese stock market is expected to welcome more fundamental-based increases. JPMorgan's research reports are bullish on the Chinese stock market, believing that after four years of adjustment, various fundamentals are gradually improving, with AI technology empowerment and consumer recovery becoming new growth drivers.
JPMorgan analysts detailed four bullish points in their research report: relative profit growth advantages within Asia, DeepSeek's ability to reduce costs and increase efficiency, stabilization in the real estate market, and improved liquidity supporting A-share allocations. However, JPMorgan cautioned that investors still need to be vigilant about risks related to USA trade policies and macroeconomic factors.
At the same time, JPMorgan raised the target prices for MSCI China, Hang Seng Index, and CSI 300 Index, and recommends strategic allocation in fields such as AI, premium consumption, quality real estate companies, and healthcare.
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