Hang Seng

The Hang Seng Index (HSI Index) is a key index, the most common benchmark for assessing the dynamics of the Hong Kong Stock Exchange (HKEX) stock market.

Index composition

As of May 2024, 82 companies were included in the index.

As of June 2022, HSI had 69 shares. The number of components of the index has been growing since 2018, when it was 50. Financial and technology companies have the largest share in the index: 37.2% and 25.8%, respectively.

Hang Seng Composite Index (HSCI Index)

The Hang Seng Composite Index (HSCI Index) is a broader HKEX market index that includes mid-cap companies. As of June 2022, HSI included 512 shares. The index covers about 95% of the total capitalization of the Hong Kong Exchange. Financial companies and technology companies have the largest share in the index. The index differs little in structure and dynamics despite the large share of the health sector.

Industry indices

As of June 2022, 4 sectoral indices are presented within the Hang Seng:

• Hang Seng Utilities - Electric Power and Utility Sector
• Hang Seng Finance - Financial Sector
• Hang Seng Properties - Real Estate Sector
• Hang Seng Commerce & Industry - includes stocks from other sectors of the economy in Hang Seng

2024: BYD Electronic International added to index instead of Country Garden

BYD Electronic International Co. added to Hong Kong's Hang Seng index following its latest quarterly review. Country Garden Services Holdings Co. is excluded from the index.

Thus, the number of participants in the index will remain unchanged - 82, the compiler of the Hang Seng Indexes Co index said on May 17, 2024. The changes take effect on June 11.

2018: Lenovo's exclusion from the index. Capitalization drop by 60%

In early May 2018, Lenovo's exclusion from the Hang Seng index was officially announced due to a sharp drop in the company's share price. The collapse of quotations is caused by the big problems of the Chinese manufacturer in the markets of smartphones and computers.

According to Reuters, citing a statement by Hang Seng Indexes Co., the decision to exclude Lenovo from the blue-chip index was made following a revision of the Hang Seng family of indices following the quarter ended March 30. Starting June 4, Lenovo's place in Hang Seng will be taken by Chinese drug maker CSPC Pharmaceutical Group, whose capitalization has increased by 29% since the beginning of 2018, showing one of the best results among Asian medical companies.

Lenovo and CSPC Pharmaceutical Market Capitalization Change Dynamics, Bloomberg Data

Lenovo first entered the Hang Seng index in 2000, but left it in 2006. In March 2013, it returned to the index, but since then the shares of the Chinese company have fallen by almost 60%, and the market capitalization has decreased by $5.9 billion. By the close of the exchange on May 4, 2018, the value dollars of the Lenovo security was 3.72 Hong Kong, which is 0.5% more than the day before. The vendor's market capitalization amounted to 45 billion Hong Kong dollars (about $5.73 billion), which is the smallest indicator in the index.

Ratio of Stock Value to Computer Maker Earnings, Bloomberg Data

According to Bloomberg, Lenovo is trying to restore its business after the company lost ground in the smartphone market. In addition, things in the computer industry are deteriorating: in 2017, the Chinese vendor lost the first place in the supply of desktops and laptops on a global scale, and also found itself in outsiders in terms of the ratio of share price to income (see chart above).^[1]

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