Hong Kong’s main technology stock benchmark is expanding its number of constituents to 50 from 30 in a major revamp to better represent the fast-growing artificial intelligence and robotics sectors.
Hang Seng Indexes Co. said the new members will be announced on Nov. 20, with changes taking effect from Dec. 7. The stocks will be selected based on market value, turnover and sales growth, the index compiler said on Wednesday, confirming many of the suggestions floated in an earlier consultation paper.
The Hang Seng Tech Index, which includes major Chinese companies such as Alibaba Group Holding Ltd. and Tencent Holdings Ltd., has struggled with weak returns as it lacks core AI hardware firms among its members. The gauge’s heavy representation of Internet firms has been a drag, with their stocks weighed down by China’s weak consumer spending.
READ: Hong Kong Tech Index Set for Overhaul With More Firms, AI Focus
Investors have long complained that the benchmark has been slow to include some of China’s pioneering tech firms. AI model developer Z.AI Co. only joined the gauge in June, after rallying more than 1,000% since its debut in January. The index is down about 24% this year, trailing its peers in China and the US.
New constituents should have an average daily turnover of at least HK$100 million ($12.7 million) over the past three months, according to the statement. For the 10 companies chosen by revenue growth, it must have annual sales of at least HK$500 million in the most recent two financial years.