Strategy Note /
Hong Kong

HK : Strategy - The first HSI reshuffle post-reform in May

    CGS-CIMB
    18 April 2021
    Published by

    The upcoming quarterly review for the Hang Seng Index (HSI) will be conducted on 21 May. It will adopt the reform proposed in early Mar. Since the target is to reach 80 stocks by mid-2022, this implies that about five stocks will be added to the index in each of the next five rounds of the quarterly review. If a balanced representation of various industries is more important, we expect JD Health, BYD, Smoore International, Country Garden Services and Xinyi Solar to have a higher chance of being added to the HSI. Tencent and AIA will be affected by the weighting cap of 8%, while Alibaba and Meituan will enjoy the increase in the weighting cap from 5% to 8%. The weighting of the financial sector is expected to drop from 40.78% (16 Apr) to 36.4% in Jun based on the new methodology.