Lenovo has been named as one of the initial members of the new Hang Seng TECH Index, which debuts on July 27 and tracks the 30 largest qualifying technology companies listed on the Hong Kong stock exchange.
The Hang Seng TECH Index will focus on technology companies, including internet, fintech, cloud, e-commerce and digital companies. To qualify for the index, companies also are evaluated by whether they operate via a technology-enabled platform, their research and development expenses to revenue ratio, and their revenue growth.
In addition to Lenovo, other initial members of the new index include Alibaba, Tencent, Xiaomi and Kingsoft.
The Hang Seng Indexes Company, which manages and compiles the Hang Seng Family of Indexes, saw the need for the specific index due to the growth of technology companies on the Hong Kong exchange. According to back-testing data, the Hang Seng TECH Index would have achieved significant returns of 36.2% and 35.3% for the full year of 2019 and the first half of 2020 respectively.
The index constituency will be reviewed quarterly with a Fast Entry Rule such that sizable newly listed companies with technology themes could be included in the index in a timely manner. The new index is calculated and disseminated in real-time at two-second intervals.
To learn more, see the Hang Seng Indexes Company release here.