【明報專訊】The Shanghai-Hong Kong Stock Connect (滬港通) was launched last Monday. Let's learn more about Hong Kong's stock market. Launched today in 1969, the Hang Seng Index (恒生指數) has been one of the indicators of this city's ups and downs.
1. What is HSI?
A major stock market index in Hong Kong, the Hang Seng Index (HSI) is based on the market prices of the 50 HSI constituent stocks (恒指成分股). It reflects price movements of the major sectors of the market, and is the most important indicator of the overall market performance in Hong Kong. The HSI is compiled and maintained by Hang Seng Indexes Company Limited (恒生指數有限公司), a wholly owned subsidiary (子公司) of Hang Seng Bank (恒生銀行).
The HSI is capitalisation-weighted, meaning that the HSI constituent stocks are weighted (加權) according to their total market values. This further means that the higher a company's overall market value, the greater the impacts its price changes have on the index.
2. What are HSI constituent stocks?
The 50 HSI constituent stocks are grouped into four categories: finance (金融), utilities (公用事業), properties (地產) and commerce and industry (工商業). On 14 November 2014, the 10 HSI constituent stocks of the highest market values were as follows: (See the table)
It should be noted that the list of HSI constituent stocks, also known as blue-chip stocks (藍籌股), is not constant but reviewed quarterly. For example, the Link REIT (領匯房產基金, 0823) became an HSI constituent stock on 7 November 2014, at the expense of COSCO Pacific (中遠太平洋, 1199).
3. Brief history of HSI
The HSI has undergone highs and lows. Its base of 100 points was at first set equivalent to the stocks' total value as of the market close on 31 July 1964. It hit 58.61 points, the all-time low, on 31 August 1967, thanks to the 1967 Leftist riots (六七暴動).
The HSI was used internally by Hang Seng Bank until its public launch in 1969. On 26 October 1987 it had its worst day. It had lost 420.81 points (more than 10%) on 19 October, the so-called Black Monday (黑色星期一), forcing the Stock Exchange of Hong Kong Limited (SEHK, 聯交所), now incorporated into the Hong Kong Exchanges and Clearing Limited (HKEx, 港交所), to suspend trading for four days. The HSI slumped 33.3% when trading resumed on 26 October.
The HSI reached its all-time high of 31958.41 points on 30 October 2007, thanks to investors' keen anticipation of the "through train" scheme (港股直通車), a channel through which mainlanders could invest in Hong Kong equity.
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