What Is the Hang Seng Index (HSI)?

The Hang Seng Index or HSI is a market capitalization-weighted index of the largest companies that trade on the Hong Kong Exchange.

Key Takeaways

  • The Hang Seng Index (HSI) is a benchmark for blue-chip stocks traded on the Hong Kong stock exchange.
  • The index is composed of four sub-sector indices in industry, finance, utilities, and real estate investment trusts.
  • The index uses a free float market capitalization weighting scheme with a 10% cap on any one component's index weight.

Understanding the Hang Seng Index (HSI)

A subsidiary of the Hang Seng Bank maintains the Hang Seng Index and has done so since 1969. The index aims to capture the leadership of the Hong Kong exchange and covers approximately 65% of its total market capitalization. The Hang Seng is the most widely quoted barometer for the Hong Kong economy and is often used as a market benchmark for Hong Kong investors. Because of Hong Kong's status as a special administrative region of China, there are close ties between the two economies, and many Chinese companies are listed on the Hong Kong Exchange.

Hang Seng members also fall into one of four sub-indexes, including commerce and industry, finance, utilities, and properties. A 10% capping is applied to avoid any single stock domination of the index. A committee convenes on a quarterly basis to evaluate the index components and decide if companies should be added or removed.

The HSI is a free float-adjusted market capitalization weighted index with that is calculated and disseminated real-time at 2-second intervals during the trading hours of the Hong Kong stock exchange (HKEx). The HSI is also a price index without adjustments made for cash dividends or warrant bonuses.

Hang Seng Components

The top thirty holdings in the Hang Seng Index as of January 2020 were (in no particular order):

  1. China Petroleum & Chemical Corporation
  2. Henderson Land Development Company Limited
  3. Sun Hung Kai Properties Limited
  4. Sino Land Company Limited
  5. Wharf Real Estate Investment Company Limited
  6. BOC Hong Kong (Holdings) Limited
  7. WH Group Limited
  8. New World Development Company Limited
  9. The Hong Kong and China Gas Company Limited
  10. Hang Lung Properties Limited
  11. Hang Seng Bank Limited
  12. CK Infrastructure Holdings Limited
  13. CLP Holdings Limited
  14. Power Assets Holdings Limited
  15. China Life Insurance Company Limited
  16. CITIC Limited
  17. Industrial and Commercial Bank of China Limited
  18. AIA Group Limited
  19. Tencent Holdings Limited
  20. Galaxy Entertainment Group Limited
  21. Ping An Insurance (Group) Company of China, Ltd.
  22. Sands China Ltd.
  23. Hengan International Group Company Limited
  24. CSPC Pharmaceutical Group Limited
  25. CNOOC Limited
  26. China Mengniu Dairy Company Limited
  27. China Resources Land Limited
  28. Techtronic Industries Company Limited
  29. AAC Technologies Holdings Inc.
  30. China Mobile Limited