Hang Seng Index
| Company type | Subsidiary |
|---|---|
| Industry | Financial services |
| Founded | November 24, 1969 |
| Founder | Hang Seng Bank |
| Headquarters | Hong Kong , Hong Kong |
Area served | Hong Kong |
| Products | Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng China AH Index Series, Hang Seng Composite Index Series |
| Owner | Hang Seng Bank (subsidiary of HSBC Holdings plc) |
| Parent | Hang Seng Bank |
The Hang Seng Index (HSI) is a capitalisation-weighted stock market index based in Hong Kong, with adjustments made for free float. It monitors the daily performance of the largest companies listed on the Hong Kong Stock Exchange, covering approximately 58% of the exchange's total market capitalisation through its 82 constituent stocks.
Introduced on November 24, 1969, the HSI is developed and overseen by Hang Seng Indexes Company Limited, a fully owned subsidiary of Hang Seng Bank, which ranks among Hong Kong’s top banks by market value. This firm administers the Hang Seng Index as well as other significant indices including the Hang Seng China Enterprises Index, Hang Seng China AH Index Series, and the Hang Seng Composite Index Series. Despite being publicly traded, Hang Seng is under the control of global financial giant HSBC Holdings plc, which itself, together with Hang Seng Bank, forms part of the index’s components.
History
The concept of the Hang Seng Index was inspired by Ho Sin Hang, then chairman of Hang Seng Bank, who aimed to create a "Dow Jones Index for Hong Kong." Collaborating with Hang Seng Director Lee Quo-wei, he commissioned the bank’s Research head, Stanley Kwan, to design the index in 1964. Originally intended for internal use within Hang Seng Bank, it was officially launched to the public on November 24, 1969.
Statistics
The Hang Seng Index started with a baseline value of 100 points, reflecting stock prices as of July 31, 1964. Its lowest recorded value was 58.61 on August 31, 1967. Notable milestones include breaking through 10,000 points in December 1993, reaching 20,000 points in December 2006, and surpassing 30,000 points in October 2007. The highest closing level ever recorded was 33,223.58 points on January 26, 2018.
From late 2007 into early 2008, the index experienced a nearly 30% decline, dropping below the 20,000 mark by September 2008 and hitting a trough of 10,676.29 in October that year—approximately two-thirds below its peak. It recovered past the 20,000 threshold by July 2009 and rose above 25,000 by August 2014. The index reached new peaks exceeding 28,000 points in April 2015 before entering a bear phase by August that year, fluctuating between roughly 18,000 and 19,000 points until February 2016.
In June 2016, following the UK’s referendum decision to leave the EU ("Brexit"), the index sharply declined by about 1,000 points and continued to fall before partially recovering towards the end of that month.
Contract Specification
The Hang Seng Index futures are traded on the Hong Kong Futures Exchange (HKFE). The principal contract details are:
| Feature | Specification |
|---|---|
| Contract Size | HK$50 per Hang Seng Index Point |
| Exchange | HKFE |
| Sector | Index |
| Minimum Price Movement (Tick Size) | 1 point |
| Tick Value | HK$50 |
| Big Point Value (BPV) | HK$50 |
| Currency Denomination | Hong Kong Dollar (HKD) |
| Decimal Precision | None (0 decimal places) |
Annual Returns
The following table outlines the annual closing values and percentage changes of the Hang Seng Index since its inception in 1964. This data illustrates its historical volatility and growth patterns relevant for investors and market analysts:
| Year | Closing Level | Change (Points) | Change (%) |
|---|---|---|---|
| 1965 | 82.14 | — | — |
| 1966 | 79.69 | −2.45 | −2.98 |
| 1967 | 66.92 | −12.77 | −16.02 |
| 1968 | 107.55 | 40.63 | 60.71 |
| 1969 | 155.47 | 47.92 | 44.56 |
| 1970 | 211.64 | 56.17 | 36.13 |
| 1971 | 341.36 | 129.72 | 61.29 |
| 1972 | 843.40 | 502.04 | 147.07 |
| 1973 | 433.68 | −409.72 | −48.58 |
| 1974 | 171.11 | −262.57 | −60.54 |
| 1975 | 350.00 | 178.89 | 104.55 |
| 1976 | 447.67 | 97.67 | 27.91 |
| 1977 | 404.02 | −43.65 | −9.75 |
| 1978 | 495.51 | 91.49 | 22.64 |
| 1979 | 879.38 | 383.87 | 77.47 |
| 1980 | 1,473.59 | 594.21 | 67.57 |
| 1981 | 1,405.82 | −67.77 | −4.60 |
| 1982 | 783.82 | −622.00 | −44.24 |
| 1983 | 874.94 | 91.12 | 11.63 |
| 1984 | 1,200.38 | 567.35 | 89.62 |
| 1985 | 1,752.45 | 552.07 | 45.99 |
| 1986 | 2,568.30 | 815.85 | 46.55 |
| 1987 | 2,302.75 | −265.55 | −10.34 |
| 1988 | 2,687.44 | 384.69 | 16.70 |
| 1989 | 2,836.57 | 149.13 | 5.55 |
| 1990 | 3,024.55 | 187.98 | 6.63 |
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Components
On January 2, 1985, four distinct sub-indices were introduced to enhance clarity by grouping the index's constituent stocks into specific sectors. As of February 2024, the Hang Seng Index (HSI) comprises 82 constituent companies, which are divided among the Finance, Utilities, Properties, and Commerce & Industry categories.
"|Template:SEHK\" "|CK Hutchison Holdings Limited" "|Commerce & Industry" "|-" "|Template:SEHK\" "|Galaxy Entertainment Group Ltd." "|Commerce & Industry" "|-" "|Template:SEHK\" "|MTR Corporation Ltd" "|Commerce & Industry" "|-" "|Template:SEHK\" "|Geely Auto" "|Commerce & Industry" "|-" "|Template:SEHK\" "|Alibaba Health" "|Commerce & Industry" "|-" "|Template:SEHK\" "|CITIC Limited" "|Commerce & Industry" "|-" "|Template:SEHK\" "|WH Group" "|Commerce & Industry" "|-" "|Template:SEHK\" "|China Resources Beer" "|Commerce & Industry" "|-" "|Template:SEHK\" "|Orient Overseas (International) Limited" "|Commerce & Industry" "|-" ...The Hang Seng Composite Index Series was introduced on October 3, 2001, serving as a comprehensive benchmark for Hong Kong’s equity market. Its most recent update occurred in March 2010 and it includes more than 300 stocks, collectively representing around 95% of the market capitalization of Hong Kong-listed equities.
To ensure fairness and transparency, the Hang Seng Indexes Company Limited formed an Independent Advisory Committee responsible for supervising index management, including the selection of constituents and the creation of new indices.
Hang Seng Industry Classification System
The Hang Seng Industry Classification System—previously known as the Hang Seng Stock Classification System—is developed by Hang Seng Indexes Company Limited to depict sectoral trends within Hong Kong’s equity market. It is constructed to be consistent with global industry classification standards while catering to the unique characteristics of Hong Kong’s market environment.
Classification principles:
i) The foremost criterion for stock categorization is sales revenue, though profit or asset values are utilized when they provide a more accurate reflection.
ii) Firms are allocated to specific sectors based on the dominant portion of their sales revenue, or alternatively profit/assets if more applicable.
iii) Stocks undergo reclassification in response to significant corporate transformations such as major mergers or acquisitions.
Industry sectors include:
- Energy (能源業)
- Material (源材料業)
- Industrial Goods (工業製品業)
- Consumer Goods (消費品製造業)
- Services (服務業)
- Telecommunications (電訊業)
- Utilities (公共事業)
- Financials (金融業)
- Properties & Construction (地產建築業)
- Information Technology (資訊科技業)
- Conglomerates (綜合企業)
Information sources
The classification process depends on publicly accessible documents such as annual reports and corporate disclosures.
Criteria for selecting HSI constituent stocks
Selection of HSI components involves thorough evaluation combined with external consultation. To qualify, companies must:
- Fall within the leading 90% by total market capitalization of all ordinary shares;
- Be ranked within the top 90% by turnover on the Stock Exchange of Hong Kong Limited ("SEHK");
- Maintain a listing duration of at least 24 months or satisfy specific minimum listing periods determined by market capitalization:
Minimum Listing Periods for Large-cap Stocks Listed under 24 Months
| Average Market Cap Ranking | Required Minimum Listing Duration |
|---|---|
| Top 5 | 3 Months |
| 6–15 | 6 Months |
| 16–20 | 12 Months |
| 21–25 | 18 Months |
| Below 25 | 24 Months |
Final inclusion decisions emphasize:
- Rankings based on market capitalization and trading turnover;
- Balanced representation across HSI sub-sectors;
- Overall financial performance.
HSI calculation methodology
The Hang Seng Index is computed using the formula:
<math> \textrm{Current~Index}= \frac{\sum\textrm{[}\textrm{P(t)}\times\textrm{IS}\times\textrm{FAF}\times\textrm{CF}\textrm{]}}{\sum\textrm{[}\textrm{P(t-1)}\times\textrm{IS}\times\textrm{FAF}\times\textrm{CF}\textrm{]}} \times \textrm{Yesterday's~Closing~Index}.</math>
Where:
- P(t): Price on day t
- P(t-1): Closing price on day t-1
- IS: Number of issued shares (only the H-share portion counted for H-share constituents)
- FAF: Freefloat adjustment factor (ranging from 0 to 1), updated quarterly
- CF: Capping factor (ranging from 0 to 1), updated quarterly
Daily HSI reports
Market participants tracking Asian equities rely on several key daily publications for insights:
- Hang Seng Indexes Daily Bulletin
- Performance Report of Hang Seng Index (HSI) Constituent Stocks
- Summary of Index Performance
- Daily Bulletin of Total Return Index Series
HSI representativeness
The Hang Seng Index captures about 60% of the overall market capitalization, a level of coverage that compares favorably with leading international stock indices.
Additional Hang Seng Stock Indexes
- Hang Seng China Enterprises Index (恒生中國企業指數)
- Hang Seng China-Affiliated Corporations Index (恒生香港中資企業指數)
- Hang Seng China H-Financials Index (恒生中國H股金融行業指數)
- Hang Seng Mainland 100 (恒生中國內地100)
- Hang Seng Mainland 25 (恒生中國內地25)
- Hang Seng HK 35 (恒生香港35)
- Hang Seng REIT Index (恒生房地產基金指數)
- Hang Seng Corporate Sustainability Index Series (恒生可持續發展企業指數系列)
- Hang Seng Composite Index (恒生綜合指數系列)
- Hang Seng Composite Industry Indexes (恒生綜合行業指數)
- Hang Seng Composite Size Indexes (恒生綜合市值指數)
- Hang Seng Short & Leveraged Index Series (恒生短倉及槓桿指數系列)
- Hang Seng China A Industry Top Index (恒生A股行業龍頭指數)
- Hang Seng China 50 Index (恒生神州50指數)
- Hang Seng China AH Premium Index (恒生AH股溢價指數)
- Hang Seng China AH Index Series (恒生AH指數系列)
- Hang Seng Total Return Index Series (恒生股息累計指數系列)
- Hang Seng Dividend Point Index Series (股息點指數系列)
- Hang Seng Global Composite Index
- (恆生科技指數)
Related Indices
- Dow Jones Industrial Average
- Nikkei 225
- SSE Composite Index
- SZSE Component Index
- FTSE China A50 Index