|
|
 | | | |
- close
- close
- close
- close
Hang Seng Index (HSI) |
Suggest other news sources for this topic
WIKI ANALYSIS|
Error creating thumbnail: convert: unable to open image `/home/wikinvest/src_live_1/mediawiki/images/a/ad/Indices.png': No such file or directory @ blob.c/OpenBlob/2480. convert: unable to open file `/home/wikinvest/src_live_1/mediawiki/images/a/ad/Indices.png' @ png.c/ReadPNGImage/2889. convert: missing an image filename `/home/wikinvest/src_live_1/mediawiki/images/thumb/a/ad/Indices.png/40px-Indices.png' @ convert.c/ConvertImageCommand/2800. |
This article describes an index that measures the performance of an exchange, industry or a geographic region. View articles referencing this index. |
The Hang Seng index is a market capitalization weighted index that follows the top 40 or so companies that trade on the Hong Kong Stock Exchange. The index covers over 65% of the total market capitalization of the exchange[1].The index is maintained and published by the Hang Seng Indexes Company Ltd, a subsidary of the Hang Seng Bank in HK, since 1969. These companies are classified into sub categories namely, Commerce and Industry, Finance, Properties and Utilities. These sub-categories are published as indexes as well.
Stock Selection Criteria
Constituent stocks of the HSI are selected by a rigorous process of detailed analysis, supported by extensive external consultation. To be eligible for selection, a company:
- must be among those companies that constitute the top 90% of the total market value of all eligible shares listed on the SEHK (market value is expressed as an average of the past 12 months);
- must be among those companies that constitute the top 90% of the total turnover of all eligible shares listed on the SEHK (turnover is aggregated and individually assessed for eight quarterly sub-periods over the past 24 months); and
- should normally have a listing history of at least 24 months on the SEHK[2]
Weighting
The Hang Seng is calculated with this formula:
Free Float Adjustment
The Free float Adjustment factor, or FAF for short, represents the proportion of shares that is freefloated as a percentage of issued shares and then its rounded up to the nearest mulitple of 5% for calculation purposes. The compilation with a Cap factor was switched to the FAF, September 2006 onwards. The cap factor was originally calculated in each regular half yearly, such that none of the stocks weighed in more than 15% percent.
To find the free-float capitalization of a company, first find its market cap (number of outstanding shares x share price) then multiply its free-float factor.
The free-float factor is determined by the percentage of floated shares to outstanding. For example, if a company has a float of 4 million shares and outstanding shares of 5 million, the percent of float to outstanding is 80%. A company with an 80% free float falls in the 75-80% free-float factor, or 0.80, which is then multiplied by its market cap. For example: $120 million (12 million shares at $10/share) x 0.80 = $96 million.[6]
Composition
The composition of the Hang Seng Index, as of 8th March, 2010:[7]
References
| |||||||
