The Hong Kong stock market sees its future in Chinese technology

The Hong Kong stock market sees its future in Chinese technology

Indicators of Hang Seng, the city’s leading translator, announced on Monday the creation of a new standard that will follow the top 30 Technology companies trading in Hong Kong. The Hang Sengtech index is expected to start next week.
It has rocked Hong Kong’s role as a global financial center in recent months before Tensions between the United States and China, Which intensified with the progress of Beijing Tightening its grip on the city. Some criticized the comprehensive national security law that China had imposed on the city as undermining political and legal freedoms that had existed since Britain handed over the former colony to China in 1997.

However, the technology index indicates that Hong Kong is looking to consolidate its position as geopolitical repercussions spread.

The city has recently become increasingly attractive to Chinese companies who fear for their business prospects in the United States. Ali Baba (Baba), Netease (NTES) And (Dinar) – all of which are businesses in New York – in recent months have secondary listings in Hong Kong. Ant Group, the company in charge of Chinese mobile payment business Alipay, announced on Monday that it had chosen both Hong Kong and Shanghai for its initial public offering.
Some of the biggest technology heroes in China, including Ali Baba, Tencent (TCEHY)Meituan Dianping and Xiaomi will be included in the new technology index. They will have a combined weight in excess of 33%.

“The technology sector has become increasingly important to the Hong Kong market,” said Daniel Wong, Director and Head of Research and Analysis at HSI. “We hope this move will help attract more technology companies to be listed in Hong Kong.”

The rise of the Chinese technology sector in Hong Kong may not end with the creation of this new indicator as well. Starting next month, more technology stocks may start appearing on Hang Seng Index (HSI), The main criterion for the city. Index compiler Change the rules In May to allow companies that have chosen the city for secondary inclusion to appear on the index. The Hang Seng indices said at the time that market support for change was “enormous”.

“The Hong Kong stock market has become more heavy in technology, which is good for positioning it as an international financial center,” said Kenny Tang, co-founder and CEO of Hong Kong-based Royston Securities.

The 51-year-old Hang Seng index is dominated by financial conglomerates and local real estate developers, including HSBC (HBCYF), Ck Hutchison (As a freak) And Sun Hong Kai properties (SUHJF). Only three of its components include fifty technology companies.

But the influx of Chinese technology companies in recent months has dominated trade. Tencent, Ali Baba and Metuan, for example, were the most traded stocks in the city last month, accounting for more than 20% of the total trading volume. Only Tencent is currently included in the City Benchmark.

“The coming of Chinese technology companies to Hong Kong will radically change the city’s stock market,” Tang said.

Other analysts pointed out that Hong Kong’s role as a global business hub is evolving as China has more control over the semi-autonomous region. Brooke Silvers, chief investment officer at Adamas Asset Management, told CNN Business last week that the city might find a “new connection” as the center of Chinese finance.

Investors seem to like the new trend. Alibaba shares have jumped more than 35% since it first began trading in Hong Kong last November. Meanwhile, and NetEase have risen 7% and 15%, respectively, since their listing last month.

More companies can consider Hong Kong listings. More than 30 Chinese companies listed in the U.S. meet the requirements for secondary listing in Hong Kong, including Pinduoduo and Baidu, according to Refinitiv data provider.

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