About the Hang Seng…

Envoyer par e-mail
07/18/2019 | 05:12 pm
The Hang Seng was created with a base value of 100 in 1964 by the Hang Seng Bank (Owned by HSBC), when Hong Kong was under British rule.

The Hang Seng is a free float index weighted according to the market capitalization of the 50 largest companies traded on the Hong Kong Stock Exchange. Together with the CSI 300 (Shanghai and Shenzhen, China) and the Nikkei 225 (Tokyo, Japan), it is one of the most important stock market indices in Asia.

ISIN code: none
Mnemonic Code: HSX
Currency: HKD (Hong Kong dollar)
Stock exchange: Hong Kong

The market capitalizations of the 50 components range from Hong Kong $50 billion (AAC Technologies Holdings, or approximately US$6.4 billion) to nearly $3,500 billion (Tencent Holdings, or approximately US$448 billion).

The index is divided into four sectors: Finance (48%), Trade and Industry (35%), Property (12%) and Utilities (5%).

The top ten positions in the index - which you will find below - come from the "Finance" and "Trade and Industry" sectors. They represent more than 63% of the total weight of the index.

As of mid-July 2019 (precisely on July 16), the Hang Seng had a market capitalization of 28,619.62 points and a market capitalization of 18,592 billion Hong Kong dollars, or approximately US$2,378 billion.

The Hang Seng Dividend Reinvested ("Hang Seng Index Total Return") scores 81,997.53 points on the same day.

Source: Historical graph of Hang Seng in annual candles - Bloomberg, 07/16/2019

Highlights :

Point A corresponds to the lowest level of the index, at 58.61 points, reached in August 1967.
The city of Hong Kong fell into chaos with the leftist riots of 1967. For seven months the city experienced large-scale demonstrations against British colonial domination. In that year, Hang Seng gave up more than 18%.

Point B illustrates the largest annual percentage change, at +147.07% in 1972.
The calm before the storm... From 1968 to 1972, the Hang Seng rose five years in a row: +62% in 1968, +44.5% in 1969, +36.1% in 1970, +61.3% in 1971 and +147.1% in 1972.

Conversely, point C represents the largest annual decrease expressed as a percentage, at -60.54% in 1974.
The year 1974 marked the world's stock markets. Due to the American recession and the oil shock at the end of 1973, all the world's indices were heavily penalized.

The index lost the most points in 2008 (point D), falling by 13,425.17 points in one year.
In the wake of all the other major stock exchanges in the world, the Hang Seng has been strongly impacted by the Subprime crisis.

In 2017 (point E), the Hang Seng increased by 7,918.59 points, the largest variation expressed in number of points.
Like the main world indices, the Hang Seng had a good year, driven by stronger than expected global growth and a low interest rate environment.

Its historical record was reached in January 2018 (point F), when it exceeded 33,484 points.
In 2018, the Hong Kong Stock Exchange surpassed the Wall Street Stock Exchange and became the world leader in terms of capital raised, with US$36.6 billion raised over the year, mainly by companies in the telecommunications and Internet sectors.

Focus on the year 2019:

Since the beginning of the year, the Hang Seng reinvested dividends have increased by 13.5%. The 5 main contributions to this performance (taking into account the weight of the share in the index) are: the life insurance group Aia, for 2.97% of the total performance, the insurer Ping An Insurance Group (1.66%), the web giant Tencent (1.55%), the Hong Kong Exchanges and Clearing stock exchange (0.72%) and finally, the property investment company Link Reit (0.49%).

Source: Bloomberg, 07/16/2019

In terms of stock rankings since January, Sino BioPharmaceutical has clearly distinguished itself on the rise, winning 74% of earnings.

It has to be said that insurance and health companies are at the top of the list of the best performances and strongest contributions to performance since the beginning of the year. Indeed, the latter have benefited from the government's new initiatives to implement the "Healthy China" initiative. It is an action plan for the period 2019-2030, set up to reform the health system and "meet the growing demand for quality medical care" (source: treesor.economy.gouv).
Anaïs Lozach
© MarketScreener.com 2019
Envoyer par e-mail