SMIC, Orient Overseas included in Hang Seng Index revamp as compiler falls short of mid-2022 stocks expansion target
- The quarterly review broadens Hang Seng’s coverage to 69 stocks from the current 66
- While SMIC, Orient Overseas, Zhongsheng Group and Hongqiao Group will join the index from June 13, Apple supplier AAC Tech will be removed from the gauge
Hang Seng Indexes Company added four stocks including China’s chip maker Semiconductor Manufacturing International Corporation (SMIC) and shipping firm Orient Overseas (International) to the benchmark Hang Seng Index in its latest quarterly review on Friday.
Car retailer Zhongsheng Group Holdings and aluminium manufacturer China Hongqiao Group will also join the benchmark from June 13. Apple component supplier AAC Technologies Holdings will be removed.
Friday’s review will bring the benchmark’s coverage to 69 firms from the current 66, missing out on its goal of expanding the gauge to 80 constituents by mid-2022.
The four new stocks will have a combined weighting of 1.31 per cent on the Hang Seng Index, with SMIC the biggest at 0.6 per cent and Orient Overseas second at 0.27 per cent. Zhongsheng will have a 0.26 per cent weighting, while China Hongqiao takes 0.18 per cent. Together, they will add a combined market capitalisation of HK$571 billion (US$72.8 billion) to the index.
“For SMIC, it was only a matter of time before it was included in the Hang Seng Index, given its large market capitalisation and support from the central government in developing its semiconductor business,” said Louis Tse Ming-kwong, managing director of Wealthy Securities.”
He added that it was not a huge concern that the 80 stocks target was missed, as the index compiler can still achieve it by this year. “But what remains to be seen is which industries their picks will come from, as most industries have been well-represented by the existing constituents.”
