XPeng, Prada and BeiGene May Join Hang Seng Index
Hong Kong's Hang Seng Index may add more electric vehicle and foreign firms in its upcoming quarterly review as the exchange progresses toward its 100-member target.
Chinese EV maker XPeng and Hong Kong-listed foreign companies like Prada SpA are among potential candidates for inclusion in the stock benchmark, analysts said. Hang Seng Indexes Co. is due to announce results of the review on Feb 16.
Xpeng shares have been rising the past few days on this news. With EV and high profile foreign companies joining the Hang Seng Index, the Hong Kong market may be boosted.
"Foreign companies listed on HKEX might also be included, with names like Prada and Samsonite International SA in the consumer discretionary sector and Yancoal Australia Ltd. elsewhere," said Rebecca Sin, an analyst at Bloomberg Intelligence.
The addition of foreign stocks to the index may send a signal to more global companies to consider a listing in Hong Kong even as the city grapples with a slumping market. The Hang Seng gauge has slid more than 6% this year, after its fourth straight annual loss in 2023.
Some health-care names such as BeiGene Ltd. and Innovent Biologics Inc. may also join the benchmark given that the sector is the only one that remains under-represented, with market cap coverage of less than 50%, Sin said.
The reshuffle comes amid efforts to eventually expand the index to 100 members from 82 currently, and to achieve a more balanced representation of the city's stock market.
"With a target of reaching 100 index constituents, we do not expect there will be any deletions from the HSI in March," Brian Freitas, founder of Periscope Analytics, wrote in a note last month. Still, Hengan International Group Co. and Country Garden Services Holdings Co. are most at risk of a deletion, he said.
The changes, once announced, will take effect from Mar 4.
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