Hang Seng Indexes to revise tech index methodology after 80% support in consultation
Hang Seng Indexes will implement six revisions to its technology index methodology following a market consultation where each proposal received over 80% support. Changes include expanding tech themes, introducing a group stock selection mechanism, and increasing constituent stocks from 30 to 50.
Hang Seng Indexes Company has published the market consultation summary for proposed revisions to the Hang Seng Technology Index compilation methodology, announcing that each proposal received support from over 80 per cent of respondents. The company will implement six revisions based on two major directions.
The first direction involves expanding technology theme coverage. The requirement that eligible candidate companies must belong to one of five specified industries under the Hang Seng Industry Classification System will be removed. The themes will be consolidated and expanded into six major technology themes: digital platforms and solutions, artificial intelligence, advanced hardware, robotics and automation, cloud and frontier technology. The number of technology sub-themes will also increase from 16 to 24.
The second direction introduces a group stock selection mechanism. The stock selection scope will be revised from Main Board-listed companies to constituents of the Hang Seng Composite Large and Medium-Cap Index. A dual-group stock selection mechanism will be adopted, comprising market capitalisation ranking and revenue growth ranking. Non-existing constituent stocks must meet a minimum average daily trading turnover of HK$100 million over the past three months. Constituent stocks selected by revenue growth ranking must record at least HK$500 million in annual revenue for the most recent two consecutive fiscal years.
The number of constituent stocks will increase from 30 to 50, with 40 selected by market capitalisation ranking and 10 by revenue growth ranking over the past 12 months. The revisions will be implemented in the index review ending 30 September and will take effect in the index adjustment in December this year.