Recently, China approved a controversial national security law. Tensions between the U.S. and China have intensified in recent months. According to the opponents of this law, a national security law will undermine the political and legal freedoms the local population enjoyed since Britain handed the former colony to China in 1997.
Interestingly, Hong Kong decided to launch a new Nasdaq-like technology index. This step shows that the Asian financial hub is ready to embrace its role as a gateway for China’s tech industry to the world.
On Monday, Hang Seng Indexes announced the creation of a new benchmark index. It will track the 30 largest firms that trade in the city. Moreover, the Hang Seng TECH Index is expected to debut next week.
Moreover, the tech index suggests that Hong Kong would like to strengthen its positions as the geopolitical fallout continues to spread.
Hong Kong and tech giants
Notably, the Asian financial hub is quite attractive to Chinese companies that fear for their business prospects in the U.S.
For example, Alibaba, NetEase, and JD.com held secondary listings in Hong Kong. Importantly, all of the companies mentioned are also listed in New York.
Moreover, the company behind the Chinese payments business Alipay decided to choose Hong Kong and Shanghai for its initial public offering.
Importantly, some of the country’s biggest tech companies such as Alibaba, Tencent, Meituan Dianping, and Xiaomi will be part of the new tech index.
The tech sector became very important for the Hong Kong market. At the moment, financial conglomerates as well as local property developers are the main players.
Last but not least, Alibaba’s stock jumped more than 35% since it first traded in Hong Kong in 2019. This fact shows that investors like the new direction. Importantly, more than 30 U.S.-listed Chinese companies meet requirements for a secondary listing in Hong Kong.