TheHang Seng Index(HSI) is a market-capitalization-weightedstock market indexinHong Kong,adjusted for free float. It tracks and records daily changes in the largest companies listed on theHong Kong Stock Exchangeand serves as the primary indicator of overall market performance in Hong Kong. These 82 constituent companies represent about 58% of the capitalisation of the Hong Kong Stock Exchange.[2]
 Historical logarithmic graph of the Hang Seng Index from 1969 to 2012. | |
| Foundation | July 31, 1964[1] |
|---|---|
| Operator | Hang Seng Indexes Company |
| Exchanges | Hong Kong Stock Exchange |
| Trading symbol | HSI |
| Constituents | 82 |
| Weighting method | Capitalization-weighted |
| Website | hsi.com.hk |
| Hang Seng Index | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Traditional Chinese | Hằng sinh chỉ sổ | ||||||||||||||||||||
| Simplified Chinese | Hằng sinh chỉ sổ | ||||||||||||||||||||
| Literal meaning | ever-growing index | ||||||||||||||||||||
| |||||||||||||||||||||
HSI was publicized on November 24, 1969, and is currently compiled and maintained byHang Seng Indexes Company Limited,which is a wholly owned subsidiary ofHang Seng Bank,one of the largest banks registered and listed in Hong Kong in terms of market capitalisation.[3]It is responsible for compiling, publishing and managing the Hang Seng Index and a range of other stock indexes, such asHang Seng China Enterprises Index,Hang Seng China AH Index Series,Hang Seng China H-Financials Index,Hang Seng Composite Index Series,Hang Seng China A Industry Top Index,Hang Seng Corporate Sustainability Index SeriesandHang Seng Total Return Index Series.Hang Seng in turn, despite being a public company, is controlled by another listed international financial institutionHSBC Holdings plc.Both HSBC Holdings and Hang Seng are constituents of the index.
History
editHo Sin Hang,chairman of the Hang Seng Bank, conceived the idea of creating the Hang Seng Index as a "Dow Jones Indexfor Hong Kong ".[4][5]Along with Hang Seng DirectorLee Quo-wei,he commissioned Hang Seng's head of ResearchStanley Kwanto create the index in 1964,[4]the index was initially used for internal reference in the Hang Seng Bank, they debuted the index on November 24, 1969.[5]
Statistics
editThis sectionneeds additional citations forverification.(August 2015) |
When the Hang Seng Index was first published, its base of 100 points was set equivalent to the stocks' total value as of the market close on July 31, 1964. Its all-time low is 58.61 points, reached retroactively on August 31, 1967, after the base value was established but before the publication of the index. The Hang Seng passed the 10,000 point milestone for the first time in its history on December 10, 1993, and, 13 years later, passed the 20,000 point milestone on December 28, 2006. In less than 10 months, it passed the 30,000 point milestone on October 18, 2007. Its all-time high, set on January 26, 2018, was 33,223.58 points[6]at closing. From October 30, 2007, through March 9, 2008, the index lost 9,426 points or approximately 30%. On September 5, it fell past the 20,000 mark the first time in almost a year to a low of 19,708.39, later closing at 19,933.28. On October 8, 2008, the index closed at 15,431.73, over 50% less than the all-time high and the lowest closing value in over two years. On October 27, 2008, the index further fell to 10,676.29 points, having fallen nearly two-thirds from its all-time peak, but passed the 20,000 point milestone again to 20,063.93 on 24 July 2009. The index reached 25,000.00 on August 19, 2014, reaching as high as 25,201.21 that day, later closing at 24,909.26 points. It continued rising to hit 26,000 on April 8, 2015, with a close of 26,236.86 The following day, it rose to as much as 27,922.67 before closing at 26,944.39. Yet again, another milestone was reached on April 13, 2015, rising to over 28,000 points, or closing to 28,016.34, the highest since December 2007. On July 8, 2015, the index fell as much as 2139 points. On 21 August the index entered abear market. The index at that point hovered around 18000-19000 points,[7]until it ended in February 2016. On 24 June 2016, the market fell 1,000 points in response toUK EU referendumresults that "Leave" won the vote against "Remain". Then, the markets continuously fell on 27 and 28 June 2016 before recovered slightly on 29 June 2016.
Contract Specification
editThe Hang Seng Index is traded as a future on the Hong Kong Futures Exchange (HKFE). The full contract specifications are below:
| Hang Seng Index (HSI ) | |
|---|---|
| Contract Size: | HK$50 Hang Seng Index Points |
| Exchange: | HKFE |
| Sector: | Index |
| Tick Size: | 1 |
| Tick Value: | 50 HKD |
| Big Point Value (BPV): | 50 |
| Denomination: | HKD |
| Decimal Place: | 0 |
Annual Returns
editThe following table shows the annual development of the Hang Seng Index, which was calculated from 1964.[9][10]
| Year | Closing level | Change in Index in Points |
Change in Index in % |
|---|---|---|---|
| 1965 | 82.14 | ||
| 1966 | 79.69 | −2.45 | −2.98 |
| 1967 | 66.92 | −12.77 | −16.02 |
| 1968 | 107.55 | 40.63 | 60.71 |
| 1969 | 155.47 | 47.92 | 44.56 |
| 1970 | 211.64 | 56.17 | 36.13 |
| 1971 | 341.36 | 129.72 | 61.29 |
| 1972 | 843.40 | 502.04 | 147.07 |
| 1973 | 433.68 | −409.72 | −48.58 |
| 1974 | 171.11 | −262.57 | −60.54 |
| 1975 | 350.00 | 178.89 | 104.55 |
| 1976 | 447.67 | 97.67 | 27.91 |
| 1977 | 404.02 | −43.65 | −9.75 |
| 1978 | 495.51 | 91.49 | 22.64 |
| 1979 | 879.38 | 383.87 | 77.47 |
| 1980 | 1,473.59 | 594.21 | 67.57 |
| 1981 | 1,405.82 | −67.77 | −4.60 |
| 1982 | 783.82 | −622.00 | −44.24 |
| 1983 | 874.94 | 91.12 | 11.63 |
| 1984 | 1,200.38 | 567.35 | 89.62 |
| 1985 | 1,752.45 | 552.07 | 45.99 |
| 1986 | 2,568.30 | 815.85 | 46.55 |
| 1987 | 2,302.75 | −265.55 | −10.34 |
| 1988 | 2,687.44 | 384.69 | 16.70 |
| 1989 | 2,836.57 | 149.13 | 5.55 |
| 1990 | 3,024.55 | 187.98 | 6.63 |
| 1991 | 4,297.33 | 1,272.78 | 42.08 |
| 1992 | 5,512.39 | 1,215.06 | 28.28 |
| 1993 | 11,888.39 | 6,376.00 | 115.67 |
| 1994 | 8,191.04 | −3,697.40 | −31.10 |
| 1995 | 10,073.39 | 1,882.35 | 22.98 |
| 1996 | 13,451.45 | 3,378.06 | 33.53 |
| 1997 | 10,722.76 | −2,728.69 | −20.29 |
| 1998 | 10,048.58 | −674.18 | −6.29 |
| 1999 | 16,962.10 | 6,913.52 | 68.80 |
| 2000 | 15,095.53 | −1,866.57 | −11.00 |
| 2001 | 11,397.21 | −3,698.32 | −24.50 |
| 2002 | 9,321.29 | −2,075.92 | −18.21 |
| 2003 | 12,575.94 | 3,254.65 | 34.92 |
| 2004 | 14,230.14 | 1,654.20 | 13.15 |
| 2005 | 14,876.43 | 646.29 | 4.54 |
| 2006 | 19,964.72 | 5,088.29 | 34.20 |
| 2007 | 27,812.65 | 7,847.93 | 39.31 |
| 2008 | 14,387.48 | −13,425.17 | −48.27 |
| 2009 | 21,872.50 | 7,485.02 | 52.02 |
| 2010 | 23,035.45 | 1,162.95 | 5.32 |
| 2011 | 18,434.39 | −4,601.06 | −19.97 |
| 2012 | 22,656.92 | 4,222.53 | 22.91 |
| 2013 | 23,306.39 | 649.47 | 2.87 |
| 2014 | 23,605.04 | 298.65 | 1.28 |
| 2015 | 21,914.40 | −1,690.64 | −7.16 |
| 2016 | 22,000.56 | 86.16 | 0.39 |
| 2017 | 29,919.15 | 7,918.59 | 35.99 |
| 2018 | 25,845.70 | −4,073.45 | −13.61 |
| 2019 | 28,189.75 | 2,344.05 | 9.07 |
| 2020 | 27,231.13 | −958.62 | −3.40 |
| 2021 | 23,397.67 | −3833.46 | −14.08 |
| 2022 | 19,781.41 | −3,616.26 | −15.46 |
| 2023 | 17,047.39 | −2,734.02 | −13.82 |
Components
editOn January 2, 1985, four sub-indices were established in order to make the index clearer and to classify constituent stocks into four distinct sectors. There are 82 HSI constituent stocks in total. As of February 2024 they are:[11]
TheHang Seng Composite Index Series( hằng sinh tổng hợp chỉ sổ ) was launched on October 3, 2001, targeting on providing a broad standard of the performance of the Hong Kong stock market. It was last revamped on March 8, 2010, and comprises 307 constituents (will become 306 from August 9, 2010[citation needed]). The market capitalisation of these companies accounts for about 95% of the total capitalisation of the stocks in Hong Kong.
To ensure the impartiality of its operation, Hang Seng Indexes Company Limited established an Independent Advisory Committee to give advice on issues pertaining to the indexes, including constituent changes and the development of new indexes.
Hang Seng Industry Classification System
editHang Seng Industry Classification System(formerly called Hang Seng Stock Classification System) is a comprehensive system designed for the Hong Kong stock market by Hang Seng Indexes Company Limited. It reflects the stock performance in different sectors. It caters for the unique characteristics of the Hong Kong stock market and maintains the international compatibility with a mapping to internationalindustry classification
General classification guidelines:
i) Thesales revenuearising from each business area of a company is the primary parameter of stock classification. Profit or assets will also be taken into consideration where these better reflects the company's business.
ii) A company will be classified into differentsectorsaccording to its majority source of sales revenue(or profit or assets if relevant).
iii)Re-classificationof a stock's Industry Sector will occur once the company's business has undergone a major change, such as, substantialmergeroracquisition.
Industry sectors:
- Energy ( năng nguyên nghiệp )
- Material ( nguyên tài liêu nghiệp )
- Industrial Goods ( công nghiệp chế phẩm nghiệp )
- Consumer Goods ( tiêu phí phẩm chế tạo nghiệp )
- Services ( phục vụ nghiệp )
- Telecommunications ( điện tấn nghiệp )
- Utilities ( công cộng sự nghiệp )
- Financials ( kim dung nghiệp )
- Properties & Construction ( địa sản kiến trúc nghiệp )
- Information Technology ( tư tấn khoa kỹ nghiệp )
- Conglomerates ( tổng hợp xí nghiệp )
Source of information
The classification of each stock is based on the information available to the public, for example the annual reports and company announcements.
Selection criteria for the HSI constituent stocks
editHSI constituent stocks are selected with the use of extensive analysis, together with external consultation. To be qualified for selection, a company:
- must be among those that comprise top 90% of the total market value of all ordinary shares;
- must be among those that comprise top 90% of the total turnover on the Stock Exchange of Hong Kong Limited "SEHK" ( hương cảng giao dịch sở );
- should have a listing history of 24 months or meet the requirements of the following Guidelines:
Guidelines for Handling Large-cap Stocks Listed for Less than 24 Months
For a newly listed large-cap stock, the minimum listing time required for inclusion in the stock universe for the HSI review is as follows:
| Average MV Rank at Time of Review | Minimum Listing History |
|---|---|
| Top 5 | 3 Months |
| 6–15 | 6 Months |
| 16–20 | 12 Months |
| 21–25 | 18 Months |
| Below 25 | 24 Months |
Among the eligible candidates, final selections are based on their:
- market capitalisation and turnover rankings;
- representation of the respective sub-sectors within HSI; and
- financial performance.
Calculation formula for HSI
editThe current Hang Seng Index is calculated from this formula:
![{\displaystyle {\textrm {Current~Index}}={\frac {\sum {\textrm {[}}{\textrm {P(t)}}\times {\textrm {IS}}\times {\textrm {FAF}}\times {\textrm {CF}}{\textrm {]}}}{\sum {\textrm {[}}{\textrm {P(t-1)}}\times {\textrm {IS}}\times {\textrm {FAF}}\times {\textrm {CF}}{\textrm {]}}}}\times {\textrm {Yesterday's~Closing~Index}}.}](https://wikimedia.org/api/rest_v1/media/math/render/svg/1ff318e0832a22434e2a950ae3561dae8b3ac2c4)
Descriptions on parameters:
- P(t): Current Price at Day t
- P(t-1): Closing Price at Day (t-1)
- IS: Issued Shares (Only H-share portion is taken into calculation in case of H-share constituents.)
- FAF: Freefloat-adjusted Factor, which is between 0 and 1, adjusted quarterly
- CF: Cap Factor, which is between 0 and 1, adjusted quarterly
Daily reports for HSI
editInvestors in Asian markets monitor the following reports for investment activities:
- Hang Seng Indexes Daily Bulletin
- Hang Seng Index (HSI) Constituent Stocks Performance
- Index Performance Summary
- Total Return Index Series Daily Bulletin
Representativeness of the HSI
editThe representativeness of the HSI can be studied by the turnover of the whole stock market and by how much its market capitalisation covers. The aggregate market value of the HSI constituent stocks is maintained at approximately 60% of the total market value. This coverage ratio compares favorably with major overseas stock indices.
Other related Hang Seng stock indexes
edit- Hang Seng China Enterprises Index( hằng sinh trung quốc xí nghiệp chỉ sổ )
- Hang Seng China-Affiliated Corporations Index( hằng sinh hương cảng trung tư xí nghiệp chỉ sổ )
- Hang Seng China H-Financials Index( hằng sinh trung quốc H cổ kim dung hành nghiệp chỉ sổ )
- Hang Seng Mainland 100( hằng sinh trung quốc nội địa 100)
- Hang Seng Mainland 25( hằng sinh trung quốc nội địa 25)
- Hang Seng HK 35 ( hằng sinh hương cảng 35)
- Hang Seng REIT Index ( hằng sinh phòng địa sản cơ kim chỉ sổ )
- Hang Seng Corporate Sustainability Index Series ( hằng sinh khả trì tục phát triển xí nghiệp chỉ sổ hệ liệt )
- Hang Seng Composite Index( hằng sinh tổng hợp chỉ sổ hệ liệt )
- Hang Seng Composite Industry Indexes( hằng sinh tổng hợp hành nghiệp chỉ sổ )
- Hang Seng Composite Size Indexes ( hằng sinh tổng hợp thị trị chỉ sổ )
- Hang Seng Short & Leveraged Index Series ( hằng sinh đoản thương cập giang can chỉ sổ hệ liệt )
- Hang Seng China A Industry Top Index ( hằng sinh A cổ hành nghiệp long đầu chỉ sổ )
- Hang Seng China 50 Index( hằng sinh thần châu 50 chỉ sổ )
- Hang Seng China AH Premium Index( hằng sinh AH cổ dật giới chỉ sổ )
- Hang Seng China AH Index Series ( hằng sinh AH chỉ sổ hệ liệt )
- Hang Seng Total Return Index Series ( hằng sinh cổ tức luy kế chỉ sổ hệ liệt )
- Hang Seng Dividend Point Index Series ( cổ tức điểm chỉ sổ hệ liệt )
- Hang Seng Global Composite Index
- Hang Seng Tech Index ( hằng sinh khoa kỹ chỉ sổ )
See also
edit
References
edit- ^"HANG SENG INDEXES CELEBRATES 50TH ANNIVERSARY OF HANG SENG INDEX BASE DATE"(PDF).Hang Seng Indexes Company Limited. 16 September 2014.Retrieved4 February2024.
- ^"AHSI and its Total Return Index"(PDF).August 2015. Archived fromthe original(PDF)on 2015-09-24.Retrieved2015-09-21.
- ^"A new chapter for the Hang Seng Index".SCMP. 7 August 2014.Archivedfrom the original on 8 August 2014.Retrieved4 February2024.
- ^abKwan, Stanley S. K.(2009).The Dragon and the Crown.Hong Kong University Press. pp.101–131.ISBN9789622099555.
- ^ab"Stanley Kwan, Hang Seng Index Creator, Dies at 86".The New York Times.2012-01-10.
- ^"HKEX".www.hkex.com.hk.
- ^Nishizawa, Kana; Haigh, Adam (August 21, 2015)."Hong Kong Stocks Enter Bear Market After Falling From April Peak".Bloomberg L.P.RetrievedAugust 23,2015.
- ^"Historical Hang Seng Index Intraday Data (HSI)".PortaraCQG.Retrieved2022-09-14.
- ^"10 niên 20 bội tịnh bất thị kỳ tích —— hương cảng, mỹ quốc cổ chỉ thành trường đích khải kỳ ( dương lão kim ) - trâu chiếu hồng - chức nghiệp nhật chí - giới trị trung quốc võng".www.chinavalue.net.Archived fromthe originalon 2016-11-08.Retrieved2020-01-19.
- ^"HANG SENG INDEX (^HSI) Historical Data - Yahoo Finance".finance.yahoo.com.Retrieved2020-01-21.
- ^Hang Seng Index 2018-09-23
External links
edit- Bloomberg page for HSI:IND
- Official website(in English and Chinese)
- Hang Seng Index— onHargreaves Lansdown
- Reuters page for.HSI