Hang Seng Index

Source: Wikipedia, the free encyclopedia.
"Hang Seng" redirects here. For the bank with the same name, see Hang Seng Bank. For other uses, see Hang Seng (disambiguation).
Hang Seng Index
Historical logarithmic graph of the Hang Seng Index from 1969 to 2012.
FoundationJuly 31, 1964; 59 years ago (1964-07-31)[1]
OperatorHang Seng Indexes Company
ExchangesHong Kong Stock Exchange
Trading symbolHSI
Constituents82
Weighting methodCapitalization-weighted
Websitehsi.com.hk
Hang Seng Index 2001–2022
Hang Seng Index
Hanyu Pinyin
Héng Shēng zhǐshù
Wade–GilesHeng Sheng chihshu
Yale RomanizationHéng Shēng jřshù
IPA[xə̌ŋ ʂə́ŋʈʂɻ̩̀ʂû]
Yue: Cantonese
Yale RomanizationHàhng sāng jí sóu
JyutpingHang4 sang1 zi2 sou3
IPA[hɐ̏ŋ sɐ́ːŋ tɕǐːsǒu]

The Hang Seng Index (HSI) is a freefloat-adjusted market-capitalization-weighted stock-market index in Hong Kong. It is used to record and monitor daily changes of the largest companies of the Hong Kong stock market and is the main indicator of the overall market performance in Hong Kong. These 82 constituent companies represent about 58% of the capitalisation of the Hong Kong Stock Exchange.[2]

HSI was publicized on November 24, 1969, and is currently compiled and maintained by

Hang Seng Indexes Company Limited, which is a wholly owned subsidiary of Hang Seng Bank, one of the largest banks registered and listed in Hong Kong in terms of market capitalisation.[3] It is responsible for compiling, publishing and managing the Hang Seng Index and a range of other stock indexes, such as Hang Seng China Enterprises Index, Hang Seng China AH Index Series, Hang Seng China H-Financials Index, Hang Seng Composite Index Series, Hang Seng China A Industry Top Index, Hang Seng Corporate Sustainability Index Series and Hang Seng Total Return Index Series. Hang Seng in turn, despite being a public company, is controlled by another listed international financial institution HSBC Holdings plc
. Both HSBC Holdings and Hang Seng are constituents of the index.

History

Ho Sin Hang, chairman of the Hang Seng Bank, conceived the idea of creating the Hang Seng Index as a "Dow Jones Index for Hong Kong".[4][5] Along with Hang Seng Director Lee Quo-wei, he commissioned Hang Seng's head of Research Stanley Kwan to create the index in 1964,[4] the index was initially used for internal reference in the Hang Seng Bank, they debuted the index on November 24, 1969.[5]

Statistics

When the Hang Seng Index was first published, its base of 100 points was set equivalent to the stocks' total value as of the market close on July 31, 1964. Its all-time low is 58.61 points, reached retroactively on August 31, 1967, after the base value was established but before the publication of the index. The Hang Seng passed the 10,000 point milestone for the first time in its history on December 10, 1993, and, 13 years later, passed the 20,000 point milestone on December 28, 2006. In less than 10 months, it passed the 30,000 point milestone on October 18, 2007. Its all-time high, set on January 26, 2018, was 33,223.58 points

bear market
. The index at that point hovered around 18000-19000 points,[7] until it ended in February 2016. On 24 June 2016, the market fell 1,000 points in response to UK EU referendum results that "Leave" won the vote against "Remain". Then, the markets continuously fell on 27 and 28 June 2016 before recovered slightly on 29 June 2016.

Contract Specification

The Hang Seng Index is traded as a future on the Hong Kong Futures Exchange (HKFE). The full contract specifications are below:

Contract Specification[8]
Hang Seng Index (HSI )
Contract Size: HK$50 Hang Seng Index Points
Exchange: HKFE
Sector: Index
Tick Size: 1
Tick Value: 50 HKD
Big Point Value (BPV): 50
Denomination: HKD
Decimal Place: 0

Annual Returns

The following table shows the annual development of the Hang Seng Index, which was calculated from 1964.[9][10]

Year Closing level Change in Index
in Points 		Change in Index
in %
1965 82.14
1966 79.69 −2.45 −2.98
1967 66.92 −12.77 −16.02
1968 107.55 40.63 60.71
1969 155.47 47.92 44.56
1970 211.64 56.17 36.13
1971 341.36 129.72 61.29
1972 843.40 502.04 147.07
1973 433.68 −409.72 −48.58
1974 171.11 −262.57 −60.54
1975 350.00 178.89 104.55
1976 447.67 97.67 27.91
1977 404.02 −43.65 −9.75
1978 495.51 91.49 22.64
1979 879.38 383.87 77.47
1980 1,473.59 594.21 67.57
1981 1,405.82 −67.77 −4.60
1982 783.82 −622.00 −44.24
1983 874.94 91.12 11.63
1984 1,200.38 567.35 89.62
1985 1,752.45 552.07 45.99
1986 2,568.30 815.85 46.55
1987 2,302.75 −265.55 −10.34
1988 2,687.44 384.69 16.70
1989 2,836.57 149.13 5.55
1990 3,024.55 187.98 6.63
1991 4,297.33 1,272.78 42.08
1992 5,512.39 1,215.06 28.28
1993 11,888.39 6,376.00 115.67
1994 8,191.04 −3,697.40 −31.10
1995 10,073.39 1,882.35 22.98
1996 13,451.45 3,378.06 33.53
1997 10,722.76 −2,728.69 −20.29
1998 10,048.58 −674.18 −6.29
1999 16,962.10 6,913.52 68.80
2000 15,095.53 −1,866.57 −11.00
2001 11,397.21 −3,698.32 −24.50
2002 9,321.29 −2,075.92 −18.21
2003 12,575.94 3,254.65 34.92
2004 14,230.14 1,654.20 13.15
2005 14,876.43 646.29 4.54
2006 19,964.72 5,088.29 34.20
2007 27,812.65 7,847.93 39.31
2008 14,387.48 −13,425.17 −48.27
2009 21,872.50 7,485.02 52.02
2010 23,035.45 1,162.95 5.32
2011 18,434.39 −4,601.06 −19.97
2012 22,656.92 4,222.53 22.91
2013 23,306.39 649.47 2.87
2014 23,605.04 298.65 1.28
2015 21,914.40 −1,690.64 −7.16
2016 22,000.56 86.16 0.39
2017 29,919.15 7,918.59 35.99
2018 25,845.70 −4,073.45 −13.61
2019 28,189.75 2,344.05 9.07
2020 27,231.13 −958.62 −3.40
2021 23,397.67 −3833.46 −14.08
2022 19,781.41 −3,616.26 −15.46
2023 17,047.39 −2,734.02 −13.82

Components

On January 2, 1985, four sub-indices were established in order to make the index clearer and to classify constituent stocks into four distinct sectors. There are 82 HSI constituent stocks in total. As of February 2024 they are:[11]

Ticker Name Sub-index
SEHK: 5
HSBC Holdings plc
 Finance
SEHK: 11
Hang Seng Bank Ltd
 Finance
SEHK: 388 HKEx Limited Finance
SEHK: 939 China Construction Bank Finance
SEHK: 1299
AIA Group Limited
 Finance
SEHK: 1398 Industrial and Commercial Bank of China Finance
SEHK: 2318 Ping An Insurance Finance
SEHK: 2388 BOC Hong Kong (Holdings) Ltd Finance
SEHK: 2628 China Life Finance
SEHK: 3968 China Merchants Bank Finance
SEHK: 3988 Bank of China Ltd Finance
SEHK: 2
CLP Holdings Limited
 Utilities
SEHK: 3
Hong Kong and China Gas Company Limited
 Utilities
SEHK: 6
Power Assets Holdings Limited
 Utilities
SEHK: 836 China Resources Power Utilities
SEHK: 1038
Cheung Kong Infrastructure Holdings Limited
 Utilities
SEHK: 2688 ENN Energy Utilities
SEHK: 12 Henderson Land Development Company Limited Properties
SEHK: 16 Sun Hung Kai Properties Limited Properties
SEHK: 17 New World Development Company Limited Properties
SEHK: 101 Hang Lung Properties Limited Properties
SEHK: 688
China Overseas Land & Investment Limited
 Properties
SEHK: 823 Link REIT Properties
SEHK: 960 Longfor Properties Properties
SEHK: 1109
China Resources Land Limited
 Properties
SEHK: 1113 CK Asset Holdings Properties
SEHK: 1209 China Resources Mixc Lifestyle Properties
SEHK: 1997
Wharf Real Estate Investment Company Limited
 Properties
SEHK: 6098 Country Garden Properties
SEHK: 1 CK Hutchison Holdings Limited Commerce & Industry
SEHK: 27 Galaxy Entertainment Group Ltd. Commerce & Industry
SEHK: 66 MTR Corporation Ltd Commerce & Industry
SEHK: 175 Geely Auto Commerce & Industry
SEHK: 241
Alibaba Health Information Technology
 Commerce & Industry
SEHK: 267 CITIC Limited Commerce & Industry
SEHK: 288 WH Group Commerce & Industry
SEHK: 291 China Resources Beer Commerce & Industry
SEHK: 316 Orient Overseas (International) Limited Commerce & Industry
SEHK: 322
Tingyi
 Commerce & Industry
SEHK: 386 Sinopec Corp Commerce & Industry
SEHK: 669 Techtronic Industries Commerce & Industry
SEHK: 700
Tencent Holdings Limited
 Commerce & Industry
SEHK: 762 China Unicom Commerce & Industry
SEHK: 857 PetroChina Company Limited Commerce & Industry
SEHK: 868 Xinyi Glass Commerce & Industry
SEHK: 881 Zhongsheng Group Commerce & Industry
SEHK: 883 CNOOC Limited Commerce & Industry
SEHK: 941 China Mobile Ltd Commerce & Industry
SEHK: 968 Xinyi Solar Commerce & Industry
SEHK: 981 Semiconductor Manufacturing International Corporation Commerce & Industry
SEHK: 992 Lenovo Commerce & Industry
SEHK: 1044 Hengan International Group Co. Ltd Commerce & Industry
SEHK: 1088 China Shenhua Energy Commerce & Industry
SEHK: 1093 CSPC Pharmaceutical Group Commerce & Industry
SEHK: 1099 Sinopharm Group Commerce & Industry
SEHK: 1177
Sino Biopharm
 Commerce & Industry
SEHK: 1211 BYD Company Commerce & Industry
SEHK: 1378 China Hongqiao Group Commerce & Industry
SEHK: 1810 Xiaomi Commerce & Industry
SEHK: 1876 Budweiser Brewing Company APAC Commerce & Industry
SEHK: 1928 Sands China Commerce & Industry
SEHK: 1929 Chow Tai Fook Commerce & Industry
SEHK: 2015 Li Auto Commerce & Industry
SEHK: 2020 Anta Sports Commerce & Industry
SEHK: 2269 WuXi Biologics Commerce & Industry
SEHK: 2313 Shenzhou International Commerce & Industry
SEHK: 2319 Mengniu Dairy Commerce & Industry
SEHK: 2331 Li-Ning Commerce & Industry
SEHK: 2359 WuXi AppTec Commerce & Industry
SEHK: 2382 Sunny Optical Commerce & Industry
SEHK: 2899 Zijin Mining Commerce & Industry
SEHK: 3690 Meituan Commerce & Industry
SEHK: 3692
Hansoh Pharmaceutical Group
 Commerce & Industry
SEHK: 6618 JD Health Commerce & Industry
SEHK: 6690 Haier Commerce & Industry
SEHK: 6862 Haidilao Commerce & Industry
SEHK: 9618 JD.com Commerce & Industry
SEHK: 9633 Nongfu Spring Commerce & Industry
SEHK: 9888 Baidu Commerce & Industry
SEHK: 9961 Trip.com Group Commerce & Industry
SEHK: 9988 Alibaba Group Commerce & Industry
SEHK: 9999 NetEase Commerce & Industry

The Hang Seng Composite Index Series (恒生綜合指數) was launched on October 3, 2001, targeting on providing a broad standard of the performance of the Hong Kong stock market. It was last revamped on March 8, 2010, and comprises 307 constituents (will become 306 from August 9, 2010[citation needed]). The market capitalisation of these companies accounts for about 95% of the total capitalisation of the stocks in Hong Kong.

To ensure the impartiality of its operation, Hang Seng Indexes Company Limited established an Independent Advisory Committee to give advice on issues pertaining to the indexes, including constituent changes and the development of new indexes.

Hang Seng Industry Classification System

Hang Seng Industry Classification System (formerly called Hang Seng Stock Classification System) is a comprehensive system designed for the Hong Kong stock market by Hang Seng Indexes Company Limited. It reflects the stock performance in different sectors. It caters for the unique characteristics of the Hong Kong stock market and maintains the international compatibility with a mapping to international industry classification

General classification guidelines:

i) The sales revenue arising from each business area of a company is the primary parameter of stock classification. Profit or assets will also be taken into consideration where these better reflects the company's business.

ii) A company will be classified into different sectors according to its majority source of sales revenue(or profit or assets if relevant).

iii) Re-classification of a stock's Industry Sector will occur once the company's business has undergone a major change, such as, substantial

merger or acquisition
.

Industry sectors:

  • Energy (能源業)
  • Material (源材料業)
  • Industrial Goods (工業製品業)
  • Consumer Goods (消費品製造業)
  • Services (服務業)
  • Telecommunications (電訊業)
  • Utilities (公共事業)
  • Financials (金融業)
  • Properties & Construction (地產建築業)
  • Information Technology (資訊科技業)
  • Conglomerates (綜合企業)

Source of information

The classification of each stock is based on the information available to the public, for example the annual reports and company announcements.

Selection criteria for the HSI constituent stocks

HSI constituent stocks are selected with the use of extensive analysis, together with external consultation. To be qualified for selection, a company:

  • must be among those that comprise top 90% of the total market value of all ordinary shares;
  • must be among those that comprise top 90% of the total turnover on the Stock Exchange of Hong Kong Limited "SEHK" (香港交易所);
  • should have a listing history of 24 months or meet the requirements of the following Guidelines:

Guidelines for Handling Large-cap Stocks Listed for Less than 24 Months

For a newly listed large-cap stock, the minimum listing time required for inclusion in the stock universe for the HSI review is as follows:

Average MV Rank at Time of Review Minimum Listing History
Top 5 3 Months
6–15 6 Months
16–20 12 Months
21–25 18 Months
Below 25 24 Months

Among the eligible candidates, final selections are based on their:

  • market capitalisation and turnover rankings;
  • representation of the respective sub-sectors within HSI; and
  • financial performance.

Calculation formula for HSI

The current Hang Seng Index is calculated from this formula:

Descriptions on parameters:

  • P(t): Current Price at Day t
  • P(t-1): Closing Price at Day (t-1)
  • IS: Issued Shares (Only H-share portion is taken into calculation in case of H-share constituents.)
  • FAF: Freefloat-adjusted Factor, which is between 0 and 1, adjusted quarterly
  • CF: Cap Factor, which is between 0 and 1, adjusted quarterly

Daily reports for HSI

Investors in Asian markets monitor the following reports for investment activities:

  • Hang Seng Indexes Daily Bulletin
  • Hang Seng Index (HSI) Constituent Stocks Performance
  • Index Performance Summary
  • Total Return Index Series Daily Bulletin

Representativeness of the HSI

The representativeness of the HSI can be studied by the turnover of the whole stock market and by how much its market capitalisation covers. The aggregate market value of the HSI constituent stocks is maintained at approximately 60% of the total market value. This coverage ratio compares favorably with major overseas stock indices.

Other related Hang Seng stock indexes

  • Hang Seng China Enterprises Index (恒生中國企業指數)
  • Hang Seng China-Affiliated Corporations Index (恒生香港中資企業指數)
  • Hang Seng China H-Financials Index (恒生中國H股金融行業指數)
  • Hang Seng Mainland 100 (恒生中國內地100)
  • Hang Seng Mainland 25 (恒生中國內地25)
  • Hang Seng HK 35 (恒生香港35)
  • Hang Seng REIT Index (恒生房地產基金指數)
  • Hang Seng Corporate Sustainability Index Series (恒生可持續發展企業指數系列)
  • Hang Seng Composite Index
    (恒生綜合指數系列)
  • Hang Seng Composite Industry Indexes
    (恒生綜合行業指數)
  • Hang Seng Composite Size Indexes (恒生綜合市值指數)
  • Hang Seng Short & Leveraged Index Series (恒生短倉及槓桿指數系列)
  • Hang Seng China A Industry Top Index (恒生A股行業龍頭指數)
  • Hang Seng China 50 Index (恒生神州50指數)
  • Hang Seng China AH Premium Index(恒生AH股溢價指數)
  • Hang Seng China AH Index Series (恒生AH指數系列)
  • Hang Seng Total Return Index Series (恒生股息累計指數系列)
  • Hang Seng Dividend Point Index Series (股息點指數系列)
  • Hang Seng Global Composite Index
  • Hang Seng Tech Index (恆生科技指數)

See also

References

  1. ^ "HANG SENG INDEXES CELEBRATES 50TH ANNIVERSARY OF HANG SENG INDEX BASE DATE" (PDF). Hang Seng Indexes Company Limited. 16 September 2014. Retrieved 4 February 2024.
  2. ^ "AHSI and its Total Return Index" (PDF). August 2015. Archived from the original (PDF) on 2015-09-24. Retrieved 2015-09-21.
  3. ^ "A new chapter for the Hang Seng Index". SCMP. 7 August 2014. Archived from the original on 8 August 2014. Retrieved 4 February 2024.
  4. ^
    ISBN 9789622099555
    .
  5. ^ a b "Stanley Kwan, Hang Seng Index Creator, Dies at 86". The New York Times. 2012-01-10.
  6. ^ "HKEX". www.hkex.com.hk.
  7. ^ Nishizawa, Kana; Haigh, Adam (August 21, 2015). "Hong Kong Stocks Enter Bear Market After Falling From April Peak". Bloomberg L.P. Retrieved August 23, 2015.
  8. ^ "Historical Hang Seng Index Intraday Data (HSI)". PortaraCQG. Retrieved 2022-09-14.
  9. ^ "10年20倍并不是奇迹——香港、美国股指成长的启示(杨老金） - 邹照洪 - 职业日志 - 价值中国网". www.chinavalue.net. Retrieved 2020-01-19.
  10. ^ "HANG SENG INDEX (^HSI) Historical Data - Yahoo Finance". finance.yahoo.com. Retrieved 2020-01-21.
  11. ^ Hang Seng Index 2018-09-23

External links

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