DEFINITION of 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. 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. Hang Seng members also fall into one of four sub-indexes, including commerce and industry, finance, utilities, and properties.
BREAKING DOWN Hang Seng Index (HSI)
The Hang Seng is the most widely quoted barometer for the Hong Kong economy. 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.
The top thirty holdings in the Hang Seng Index as of June 2018 were, in order of trading volume (largest to smallest):
- Industrial and Commercial Bank of China Limited
- China Petroleum & Chemical Corporation
- CNOOC Limited
- WH Group Limited
- CSPC Pharmaceutical Group Limited
- China Life Insurance Company Limited
- Ping An Insurance (Group Company of China, LTD.
- The Hong Kong China and Gas Company Limited
- China Mobile Limited
- AIA Group Limited
- Tencent Holdings Limited
- China Mengniu Dairy Company Limited
- CITIC Limited
- Hang Lung Properties Limited
- New World Development Company Limited
- China Resources Land Limited
- China Resources Power Holdings Company Limited
- BOC Hong Kong (Holdings) Limited
- Galaxy Entertainment Group Limited
- Sino Land Company Limited
- Wharf Real Estate Investment Company Limited
- Sands China LTD.
- Power Assets Holdings Limited
- AAC Technologies Holdings Inc.
- CLP Holdings Limited
- Henderson Land Development Company Limited
- Sun Hung Kai Properties Limited
- Hengan International Group Company Limited
- CK Infrastructure Holdings Limited
- The Bank of East Asia, Limited
Recent News About the Hang Seng Index
On June 14, 2018 the Hang Seng Index dropped more than 375 points or 1.2 per cent. This was primarily due to concerns over tighter mortgage lending, following the monetary authority of Hong Kong’s matching the Federal Reserve in lifting interest rates 25 basis points The stocks of property developers Sino Land (HKG: 0083), Hang Lund Properties (HKG: 0101), and Sun Hung Kai Properties (HKG: 0016) were also down 2.2%, 1.7%, and 1.4%, respectively. Despite the event, Moody’s commented that Hong Kong banks are likely to show wider margins and become more profitable as interest rates continue to rise.