Hong Kong’s new tech index


Hong Kong’s new tech index rose on the second day of trading as experts said the diversified list in the region would be attractive to traders who want to invest in the sector.

The Hang Seng Tech index rose 3.3% against HK / SIN at 3:31 pm, beating the Broad Hang Seng index by 0.71%.

“It’s really cool, I think, that many slices in the tech sector have a list of components,” said Sam Le Cornu, CEO and co-founder of Stonehorn Global Partners.

The tech index was launched on Monday and it will track the 30 largest technology companies listed in Hong Kong that exceed the screening criteria.

Tech shares are some of the top traded stocks in Hong Kong. According to data published by the Hang Seng Index Company before trading on the first day of the new index, the new index trades at about 45 times the earnings of the Hang Seng Composite Index’s 12 to hang-in-income ratio.

The top five firms listed in the index include Alibaba, Tencent, Mittuan Diaping, Xiaomi and Sunny Optical, which had a combined weight of over 40% as of 17 July. Others include Ali Health, JD.com, Lenovo, Ping An Good Doctor and ZTE.

“So, it’s not just hardware, you’ve got some insurance done, you’ve got some cloud computing, you’ve got fintech, e-commerce, you’ve got really good slices. The only thing isn’t it . ‘T is, I think, renewable technology. So, it doesn’t have batteries, “Le Cornu said on CNBC’s” Squawk Box Asia “on Tuesday.

“Also, this is a really interesting tech index and I think it will be one that will be followed very closely,” he said.

Analysts at Citi said interest in the new index could draw some attention from the tech-heavy Nasdaq in the US and could lead to more business in the stock market operator, Hong Kong Exchange and Clearing, with “more related index-linked products”. Can be issued.

The index’s components will be reviewed quarterly and a fast-entry rule may allow important technology companies that go public in Hong Kong if they are to meet certain requirements. This means that when the fintech giant and the Alibaba affiliate Ant Group go public, it could possibly be added to the index.

Ant Group is preparing a dual list in Hong Kong as well as on the tech-focused Star Board of the Shanghai Stock Exchange. Although details about the pricing of the shares are not yet available, some analysts are predicting a huge pricing that could top some of Wall Street’s biggest banks.

Le Cornu said that Ant Group as well as other US listed Chinese tech companies that could return to Hong Kong or make secondary listings could also be added to the index under the fast-entry rule.

Rising US-China tensions have prompted some Chinese companies listed on Wall Street to return to Hong Kong. For example, the likes of Alibaba, JD.com and NetEase have made secondary listings there. If the US bill could force Chinese companies to delist the US stock exchanges, then more may follow.

Jonathan Garner, Managing Director and Emerging Markets Equity Strategist at Chief Asia and Morgan Stanley, said the new technology index is important.

“When we really look at the growth of the markets here, those inter-regional flows, especially the north-south tied channels inside and outside China, are very important for the future development of the markets here,” he said. Box Asia “on Tuesday on CNBC’s” Squawk “.

Garner said that while the US depository receipt (ADR) market, which is used by Chinese companies to list and trade in the US, is likely to be less relevant, these new indices “clearly offer a product suite Who is going to be part of the development of the market from here on out in Asia. “

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