The S&P/HKEx Large Cap index comprises 25 stocks covering approximately 75% of the Hong Kong market. The S&P/HKEx GEM index is designed to represent the Growth Enterprise Market and consists of stocks that meet strict liquidity guidelines. Both the indices will begin real-time calculation on March 3, according to a news release. The S&P/HKEx MidCap, SmallCap, and Composite indices, will be launched later in the year.
S&P/HKEx’s Large Cap index will include large international companies, such as HSBC and China Mobile, listed in Hong Kong. The weight of large companies will be capped to attempt diversification and balanced representation of the Hong Kong market. In addition, securities known as Red Chips and H-Shares will also be included in the S&P/HKEx series of indices.
Criteria for index inclusion are market capitalization, liquidity, industry or sector representation, and on-going viability. Size measurements will be based on market capitalization. Liquidity measurements will be based on trading activity on the Stock Exchange of Hong Kong.
The S&P/HKEx indices are free-float adjusted, highly liquid and sector balanced, and apply the Global Industry Classification Standard (GICS) to each constituent company. The use of GICS is designed to give investors using the S&P/HKEx indices sector and industry comparisons with other markets worldwide.