Hang Seng Index (HSI)

QUOTE AND NEWS
MarketWatch  Apr 4  Comment 
Hong Kong stocks slip as Tencent falls sharply; Hang Seng Index down 0.4%
MarketWatch  Apr 3  Comment 
Hong Kong stocks gain, helped by China stimulus news; Hang Seng Index up 0.8%
MarketWatch  Apr 2  Comment 
Hong Kong stocks gain, as property, tech shares rise; Hang Seng Index up 0.5%
MarketWatch  Apr 1  Comment 
Hong Kong stocks rise after gain in manufacturing data; Hang Seng Index up 0.6%
MarketWatch  Mar 31  Comment 
Hong Kong stocks open higher with property mostly firm; Hang Seng Index up 0.5%
MarketWatch  Mar 28  Comment 
Hong Kong stocks gain, bucking soft U.S. lead; Hang Seng Index up 0.6%
The Economic Times  Mar 28  Comment 
MarketWatch  Mar 27  Comment 
Hong Kong Hang Seng Index flat early, but Citic Pacific up 25% on reverse merger
MarketWatch  Mar 26  Comment 
Hong Kong stocks rise as banks gain; Hang Seng Index up 1%
MarketWatch  Mar 25  Comment 
Hong Kong stocks open weaker, with Hang Seng Index down 0.5%
MarketWatch  Mar 24  Comment 
Hong Kong stocks gain ahead of China data; Hang Seng Index up 0.9%




 
TOP CONTRIBUTORS


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:

Image: F hscei.gif[3]

Image: F_hscei_2.gif[4]

Image: F_hscei_3.gif[5]

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]

COMPANY NAME TICKER (HK:) Hang Seng Sub Index
Cheung Kong Holdings Ltd00001Properties
CLP Holdings Ltd00002Utilities
HK & China Gas00003Utilities
Wharf Holdings Ltd00004Commerce and Industry
HSBC Holdings PLC (HSBA-LN)00005Finance
Hong Kong Electric Holdings Ltd00006Utilities
Hang Seng Bank00011Finance
Henderson Land Development Company Ltd00012Properties
Hutchison Whampoa Limited (HKG:0013)00013Commerce and Industry
Sun Hung Kai Properties Ltd00016Properties
New World Development Co Ltd00017Commerce and Industry
Swire Pacific Ltd 'A'00019Commerce and Industry
Bank of East Asia00023Finance
MTR Corporation00066Commerce and Industry
Sino Land Co Ltd00083Properties
Hang Lung Properties Ltd00101Properties
China Merchants Holdings (International) Co Ltd00144Commerce and Industry
CITIC Pacific Ltd00267Commerce and Industry
China Resources Enterprise Ltd00291Commerce and Industry
Cathay Pacific Airways Ltd00293Commerce and Industry
Esprit Holdings Ltd00330Commerce and Industry
SINOPEC Shangai Petrochemical Company (SNP)00386Commerce and Industry
HKEx Ltd 00388Finance
Li and Fung00494Commerce and Industry
China Overseas Land and Investment Ltd00688Properties
Tencent (TCEHF)00700Commerce and Industry
CHINA UNICOM (CHU)00762Commerce and Industry
China Res Power00836Utilities
PetroChina Company (PTR) 00857Commerce and Industry
CNOOC, Ltd. (CEO)00883Commerce and Industry
China Construction Bank00939Finance
China Mobile (Hong Kong) (CHL)00941Commerce and Industry
China Shenhua Energy Company Ltd01088Commerce and Industry
China Res Land01109Properties
COSCO Pacific Ltd01199Commerce and Industry
Industrial and Commercial Bank of China01398Finance
Foxconn International Holdings Ltd02038Commerce and Industry
Ping An Insurance (PNGAY.PK)02318Finance
Bank of Commerce Holdings (CA) (BOCH)02388Finance
Aluminum Corporation of China (ACH)02600Commerce and Industry
China Life Insurance Company (LFC)02628Finance
Bank of Communications Ltd03328Finance
Bank of China (HKG:3988)03398Finance

References

  1. Investopedia
  2. Hang Seng Index Selection Criteria
  3. HSI Formula
  4. HSI Formula
  5. HSI Formula
  6. Investopedia.com
  7. Constituent Contribution to Hang Seng Index Change
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