Hang Seng Index Adds 3 Stocks, Lifting Market Value 4.5% to $2.15 Trillion
Updated
Updated · South China Morning Post · May 25
Hang Seng Index Adds 3 Stocks, Lifting Market Value 4.5% to $2.15 Trillion
2 articles · Updated · South China Morning Post · May 25
Goldman Sachs said the Hang Seng Index’s latest quarterly review will raise the gauge’s market capitalisation 4.5% to about US$2.15 trillion when changes take effect next month.
BeOne Medicine, Chalco and J&T Global Express will join the benchmark, taking the constituent count to 93 from 90 and moving the index closer to compiler Hang Seng’s 100-member target.
Index weighting changes could draw roughly US$200 million to US$1 billion of fund inflows into Tencent, BeOne Medicines, Baidu and NetEase, according to the bank’s analysts.
The reshuffle would also lift the index’s forward price-to-earnings ratio to 11.2 times from 11.1, while seven companies added to the Hang Seng Composite Index become eligible for potential mainland buying via Stock Connect.
Is a company’s value now dictated more by index inclusion than by its fundamental business performance?
With passive funds set to inflate new HSI stocks, are investors walking into a bubble destined to pop?
As new HSI firms open to mainland investors, will this influx of capital stabilize or amplify market volatility?