This week, Hang Seng Indexes made an important announcement. The city’s leading compiler announced the creations of a new benchmark index. Importantly, the new benchmark index will track the 30 largest firms that trade in the city. It is worth mentioning that the Hang Seng TECH Index is expected to debut next week.
Hong Kong is ready to embrace its role as a gateway for China’s tech industry to the world. The decision to launch a new Nasdaq-like technology index once more underlines this fact.
Furthermore, the tech index suggests that the Asian financial hub wants to strengthen its positions as the geopolitical fallout continues to spread. China approved a controversial national security law not too long ago, so this is a timely move.
Moreover, a national security law has the potential to undermine the political and legal freedoms the local population had enjoyed for decades.
Technology index, Hong Kong, and giant companies
Interestingly, Hong Kong is quite attractive to Chinese companies who would like to minimize risk factors connected with their business prospects in the U.S.
In recent months, Alibaba, NetEase, as well as JD.com, held secondary listings in Hong Kong. All of the companies stated above are also listed in New York.
Furthermore, the Ant Group is the company behind the Chinese payments business Alipay. This company decided to choose Hong Kong and Shanghai for its initial public offering.
Let’s have a look Hang Seng TECH Index. Some of China’s biggest tech companies, such as Alibaba, Tencent, Meituan Dianping, and Xiaomi, will be part of the new tech index. The tech sector became important for the Hong Kong market step-by-step. Alibaba’s stock soared more than 35% since its first trade in Hong Kong in November 2019. Notably, more than 30 U.S.-listed Chinese companies meet the requirements for a secondary listing in Hong Kong. The Asian financial hub has the potential to attract at least some of them.
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