Hong Kong Exchange Introduces New Tech 100 Index

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The Hong Kong Stock Exchange has introduced the new Tech 100 Index, featuring prominent Chinese technology giants like Tencent Holdings, Alibaba Group, and Contemporary Amperex Technology. Launched yesterday, this index includes the top 100 tech companies active in six cutting-edge industries: artificial intelligence, biotech and pharmaceuticals, electric vehicles and smart driving, information technology, internet services, and robotics. Each company’s market cap weight in the index is capped at 12 percent.

Companies included in the index are reviewed twice a year, in June and December. To qualify, these companies must have maintained an average daily trading volume of at least HKD 20 million (approximately USD 2.6 million) over the past six months. Additionally, they need to invest more than 3 percent of their revenue in research and development and have achieved at least 5 percent annual revenue growth in the previous two years.

“This comprehensive index highlights multiple innovative sectors transforming Hong Kong’s stock market, emphasizing its vital role in fostering emerging industries,” stated Bonnie Chan, CEO of the Hong Kong exchange. She added that the index serves as an effective tool for investors looking to capitalize on opportunities within technology and innovative sectors.

Beyond the core requirements, experts in the local stock market noted that stocks must align with other investment aims, such as demonstrating market vitality and growth potential. Low liquidity often points to limited market recognition, while a small R&D investment ratio might indicate weaker technological innovation.

All stocks in the index are part of the Shanghai or Shenzhen-Hong Kong Stock Connect schemes, ensuring access for both domestic and international investors. As of September 30, the combined market capitalization of eligible stocks under these schemes surpassed HKD 6.3 trillion (about USD 810 billion), representing roughly 12.7 percent of Hong Kong’s total market cap, according to the exchange.

Shen Meng, Executive Director of Xiangsong Capital, explained that a primary goal of the index is to pave the way for future exchange-traded funds (ETFs), expanding investment options for investors. Yesterday, the exchange announced a partnership with a major mainland asset manager to authorize the launch of ETFs tracking the Tech 100 Index on the Chinese mainland, further boosting Hong Kong-related tech investment products.

This move responds to increasing demand from mainland investors eager to gain exposure to Hong Kong-listed tech companies. As a result, the number of tech firms listed in Hong Kong has grown and diversified recently. The creation of indexes like this can offer more options for investors and boost the inflow of mainland funds into Hong Kong’s technology stocks.