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The Hong Kong stock market has launched a new stock index focused on China’s tech giants.
The Hang Seng Tech Index launched on Monday and includes internet giants like Tencent, Alibaba, and JD.com.
It will have 30 of the largest technology companies listed in Hong Kong, which are among the largest companies in the world.
The new index comes as Chinese tech companies face increased scrutiny in the U.S.
Jack Ma, the billionaire founder of Alibaba, recently announced plans to include his affiliate financial arm Ant Group in Hong Kong.
Alibaba, NetEase and JD.com are three tech giants that have recently been included in Hong Kong amid mounting tensions between the United States and China. They are included in the new Hang Seng Tech index.
The Ant Group describes itself as the world’s most valuable unicorn, a startup that has grown to a value of more than $ 1 billion (£ 778 million).
Once you’re on the public list, you should also go to the index.
Ant Group, a financial technology company (fintech), also wants to be listed on China’s technology-focused Star stock market as it avoids a listing on the US stock market.
Analysts say the Hang Seng Tech Index will attract investors to other Hong Kong tech stocks and look beyond the more well-known Hang Seng Index, dominated by banks, real estate companies, and energy companies.
“The new index aims to rival and beat Nasdaq in the US market for Chinese tech giants,” said Bruce Pang, head of macro and strategy research for China Renaissance Securities.
The Hang Seng Tech Index will track Hong Kong-listed companies that have high commercial exposure to select technology topics such as the Internet, fintech, cloud, e-commerce, and digital activities.
What does it mean for investors?
Investment experts say it will be more convenient for investors who want to buy Chinese tech companies listed in Hong Kong now that they have their own index.
There is a huge appetite for tech stocks like Alibaba and Tencent, which have generally performed well during the coronavirus pandemic as more people go online to shop and entertain.
The new index could trigger the launch of specialized investment funds that track these 30 tech stocks, known as exchange-traded funds (ETFs).
“This is a great new and positive addition, marking continued growth in China’s technology space and its participation in the minds and portfolio of local and international investors alike,” added Andy Maynard, managing director of the investment bank. China Renaissance.
