Hang Seng Index

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Hang Seng Index
Hang Seng Index.png
Historical logarithmic graph of the Hang Seng Index from 1969 to 2012.
FoundationNovember 24, 1969; 53 years ago (1969-11-24)
OperatorHang Seng Indexes Company
ExchangesHong Kong Stock Exchange
Trading symbolHSI
Constituents73
Weighting methodCapitalization-weighted
Websitehsi.com.hk
Hang Seng Index 2001 - 2022
Hang Seng Index
Traditional Chinese恒生指數
Simplified Chinese恒生指数
Literal meaningever-growing index

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 66 constituent companies represent about 58% of the capitalisation of the Hong Kong Stock Exchange.[1]

HSI was started 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. 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[edit]

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".[2][3] Along with Hang Seng Director Lee Quo-wei, he commissioned Hang Seng's head of Research Stanley Kwan to create the index,[2] which debuted on November 24, 1969.[3]

Statistics[edit]

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[4] at closing. From October 30, 2007 through March 9, 2008, the index lost 9,426 points or approximately 30%. On September 5, it fell past the 20,000 mark the first time in almost a year to a low of 19,708.39, later closing at 19,933.28. On October 8, 2008, the index closed at 15,431.73, over 50% less than the all-time high and the lowest closing value in over two years. On October 27, 2008, the index further fell to 10,676.29 points, having fallen nearly two-thirds from its all-time peak, but passed the 20,000 point milestone again to 20,063.93 on 24 July 2009. The index reached 25,000.00 on August 19, 2014, reaching as high as 25,201.21 that day, later closing at 24,909.26 points. It continued rising to hit 26,000 on April 8, 2015 with a close of 26,236.86 The following day, it rose to as much as 27,922.67 before closing at 26,944.39. Yet again, another milestone was reached on April 13, 2015 rising to over 28,000 points, or closing to 28,016.34, the highest since December 2007. On July 8, 2015, the index fell as much as 2139 points. On 21 August the index entered a bear market. The index at that point hovered around 18000-19000 points,[5] until it ended in February 2016. In 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[edit]

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

Contract Specification[6]
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[edit]

The following table shows the annual development of the Hang Seng Index, which was calculated back to 1965.[7][8]

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

Components[edit]

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 73 HSI constituent stocks in total. As of October 8, 2022 they are:[9]

Ticker Name Sub-index
SEHK5 HSBC Holdings plc Finance
SEHK11 Hang Seng Bank Ltd Finance
SEHK388 HKEx Limited Finance
SEHK939 China Construction Bank Finance
SEHK1299 AIA Group Limited Finance
SEHK1398 Industrial and Commercial Bank of China Finance
SEHK2318 Ping An Insurance Finance
SEHK2388 BOC Hong Kong (Holdings) Ltd Finance
SEHK2628 China Life Finance
SEHK3968 Bank of Communications Ltd Finance
SEHK3988 Bank of China Ltd Finance
SEHK2 CLP Holdings Limited Utilities
SEHK3 Hong Kong and China Gas Company Limited Utilities
SEHK6 Power Assets Holdings Limited Utilities
SEHK1038 Cheung Kong Infrastructure Holdings Limited Utilities
SEHK2688 ENN Energy Utilities
SEHK12 Henderson Land Development Company Limited Properties
SEHK16 Sun Hung Kai Properties Limited Properties
SEHK17 New World Development Company Limited Properties
SEHK101 Sino Land Company Limited Properties
SEHK688 Hang Lung Properties Limited Properties
SEHK823 China Overseas Land & Investment Limited Properties
SEHK960 The Link REIT Properties
SEHK1109 China Resources Land Limited Properties
SEHK1113 CK Property Holdings Limited Properties
SEHK1997 Wharf Real Estate Investment Company Limited Properties
SEHK2007 Country Garden Properties
SEHK6098 CG SERVICES Properties
SEHK1 CK Hutchison Holdings Limited Commerce & Industry
SEHK27 Galaxy Entertainment Group Ltd. Commerce & Industry
SEHK66 MTR Corporation Ltd Commerce & Industry
SEHK175 Geely Auto Commerce & Industry
SEHK241 Alibaba Health Information Technology Commerce & Industry
SEHK267 CITIC Pacific Ltd Commerce & Industry
SEHK288 WH Group Commerce & Industry
SEHK291 China Resources Beer Commerce & Industry
SEHK316 Orient Overseas (International) Limited Commerce & Industry
SEHK386 Sinopec Corp Commerce & Industry
SEHK669 Techtronic Industries Commerce & Industry
SEHK700 Tencent Holdings Limited Commerce & Industry
SEHK762 China Unicom (Hong Kong) Limited Commerce & Industry
SEHK857 PetroChina Company Limited Commerce & Industry
SEHK868 Xinyi Glass Commerce & Industry
SEHK881 Zhongsheng Group Commerce & Industry
SEHK883 CNOOC Limited Commerce & Industry
SEHK941 China Mobile Ltd Commerce & Industry
SEHK968 Xinyi Solar Holdings Commerce & Industry
SEHK981 Semiconductor Manufacturing International Corporation Commerce & Industry
SEHK992 Lenovo Commerce & Industry
SEHK1044 Hengan International Group Co. Ltd Commerce & Industry
SEHK1088 China Shenhua Energy Commerce & Industry
SEHK1093 CSPC Pharmaceutical Group Ltd Commerce & Industry
SEHK1177 Sino Biopharm Commerce & Industry
SEHK1211 BYD Company Commerce & Industry
SEHK1378 China Hongqiao Group Commerce & Industry
SEHK1810 Xiaomi Commerce & Industry
SEHK1876 Budweiser Brewing Company APAC Commerce & Industry
SEHK1928 Sands China Commerce & Industry
SEHK1929 Chow Tai Fook Commerce & Industry
SEHK2020 Anta Sports Commerce & Industry
SEHK2269 WuXi Biologics Commerce & Industry
SEHK2313 Shenzhou International Commerce & Industry
SEHK2319 Mengniu Dairy Commerce & Industry
SEHK2331 Li-Ning Commerce & Industry
SEHK2382 Sunny Optical Commerce & Industry
SEHK3690 Meituan Commerce & Industry
SEHK3692 Hansoh Pharmaceutical Group Commerce & Industry
SEHK6862 Haidilao Commerce & Industry
SEHK9618 JD.com Commerce & Industry
SEHK9633 Nongfu Spring Commerce & Industry
SEHK9888 Baidu Commerce & Industry
SEHK9988 Alibaba Group Commerce & Industry
SEHK9999 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[edit]

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.

Miguel Camarillo Cuellar owner the HSI constituent stocks=utc-8 usd desclimer= 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;208.000.000.00 utc-6 usd and
  • financial performance.

Calculation formula for HSI[edit]

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[edit]

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[edit]

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[edit]

See also[edit]

References[edit]

  1. ^ "Archived copy" (PDF). Archived from the original (PDF) on 2015-09-24. Retrieved 2015-09-21.{{cite web}}: CS1 maint: archived copy as title (link)
  2. ^ a b Kwan, Stanley S. K. (2009). The Dragon and the Crown. Hong Kong University Press. pp. 101–131. ISBN 9789622099555.
  3. ^ a b "Stanley Kwan, Hang Seng Index Creator, Dies at 86". The New York Times. 2012-01-10.
  4. ^ "HKEX". www.hkex.com.hk.
  5. ^ 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.
  6. ^ "Historical Hang Seng Index Intraday Data (HSI)". PortaraCQG. Retrieved 2022-09-14.
  7. ^ "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.
  8. ^ "HANG SENG INDEX (^HSI) Historical Data - Yahoo Finance". finance.yahoo.com. Retrieved 2020-01-21.
  9. ^ Hang Seng Index 2018-09-23

External links[edit]