On December 9, Hong Kong Exchanges and clearing limited (hkex) announced the launch of the hkex technology 100 index (hkex Technology 100) . Hkex technology 100 is the first Hong Kong stock index launched by hkex to further expand its index business and continue to promote the development of the regional capital market ecosystem.
The hkex technology 100 is a broad-based stock index that tracks the performance of the 100 largest technology companies listed on the Hong Kong stock exchange by market capitalization. The companies’ sectors cover six innovation themes: Artificial Intelligence, biotechnology and pharmaceuticals, electric vehicles and intelligent driving, information technology, the Internet and robotics. The index is composed of stocks eligible for the stock connect programme to meet the investment needs of international and Mainland Chinese investors.
Efunda to launch etfs
The Hong Kong Stock Exchange also announced on December 9 that it had signed an agreement with Mainland Chinese Asset Management Company E Fund Management Limited (E Fund) , it was Exchange-traded fund to launch etfs tracking hkex technology 100 on the Chinese mainland.
“We are pleased to launch the hkex technology 100 Index, which is an important milestone in the development of the group’s index and data business,” said Margaret Chan, chief executive officer of HKEX Group. The broad-based index covers a number of innovative sectors that have reshaped the Hong Kong market and underlines the crucial role of the market in driving the development of these emerging industries. “The index provides investors with an effective and comprehensive tool to capture opportunities in the technology and emerging sectors.”
Hkex technology 100 has a fast-track inclusion mechanism, which allows newly listed companies that meet certain conditions to join the index quickly outside the regular review cycle after being included in the stock connect.
“Our licensing arrangement with efund will further facilitate the development of Hong Kong equity-related products in the mainland Chinese market and meet the strong demand from mainland investors to capture technology investment opportunities in the Hong Kong equity market,” Chan added. We look forward to working closely with Efunda and other industry partners to develop innovative indices and products to meet the changing needs of investors and drive a broader range of investment instruments.”
“We are pleased and honoured to have the HKEX mandate to develop ETF products tracking hkex technology 100 in the mainland Chinese market,” said Liu Xiaoyan, chairman of efund. The index, an important broad-based measure of Hong kong-listed technology companies, brings together 100 innovative companies listed on the Hong Kong Stock Exchange. We look forward to launching etfs that will track the index and give investors exposure to Hong kong-listed technology companies, while empowering the real economy and fostering the development of emerging industries.”
Under the licensing agreement, efund plans to launch etfs in China that track the hkex technology 100, subject to regulatory approval and further announcements from the issuer. Looking ahead, hkex will continue to expand its index business and strengthen cooperation with industry partners to launch more index-related products.
The index has four main characteristics
It is understood that the Hong Kong Stock Exchange Technology 100 index covers a wide range of leading and emerging companies in the technology field, providing investors with diversified investment options and driving demand for related products, we will promote the vigorous development of the ecosystem of scientific and technological products. The index has the following characteristics:
The first is market cap coverage: the index covers 100 large and medium-sized technology companies eligible to trade through the Hong Kong stock connect, including companies with significant growth potential, to meet investors’ diversification needs.
Second, the listing time requirements and fast-track inclusion mechanism: index components usually need to have at least six months of listing history. However, to ensure that the index can reflect market dynamics in a timely manner, there is a fast-track inclusion mechanism to allow representative and eligible ipos to be included in addition to regular index adjustments.
Third, the Hong Kong Stock Connect trading qualifications: index component stocks must meet the Hong Kong stock connect trading qualifications. In order to ensure the investability of the index, if any constituent stocks no longer meet the trading qualification of the stock connect between periodic index adjustments, the relevant constituent stocks will be removed from the index.
The index covers six major technology and innovation themes, including artificial intelligence, biotechnology and medicine, electric vehicles and intelligent driving, information technology, the Internet and robotics, to provide investors with a wide range of investment options and opportunities, spanning leading and emerging companies.
In the specific stock selection, there are also three requirements: first, the time of listing requires a minimum of six months; second, the fundamentals require that r & D spending (in the past two financial years) should not be less than 3% of revenue, or annual revenue growth of not less than 5% , or liquidity requirement of more than HK $20 million in average daily turnover in the past six months.
The hkex also has answers to some frequently asked questions:
1. How are the weightings of constituent stocks set? Is there an upper weight limit for a single stock?
The index is calculated using a free-float weighting, with a maximum weighting of 12 per cent.
2. When will the index components adjust?
The data are adjusted semi-annually (June and December) and are closed on the last trading day in April and October, respectively.
3. can investors invest directly in indices?
Investors can not invest directly in the index, but the hkex technology 100 index serves as a benchmark for issuers to issue financial products, such as Exchange-traded fund.
4. How to assess the suitability of a particular stock for a technology theme?
In assessing whether a company fits the technology theme, hkex takes into account the nature of its core business, its revenue distribution and its sector breakdown.