Hang Seng Index

The Hang Seng index is the major stock market index of Honk Kong stock exchange. The Hang Seng index is abbreviated as HSI. It is a freefloat-adjusted market capitalization index. The Hang Seng index is used to calculate the stock trading index of the largest companies enlisted in the Hong Kong stock market.
The Hang Seng index is also the prime indicator of the entire performance of the Hong Kong stock exchange. It monitors the stock trading of 40 biggest companies that approximately represents the 65% of the Hong Kong stock exchange capitalization. The Hang Seng index is maintained by HSI Service Limited, which is a subsidiary of Hang Seng Bank.

In terms of market capitalization, the Hang Seng Bank is the largest bank in Hong Kong. The HSI Service Limited takes the responsibility to compile, manage and also publish the Hang Seng index of the stock trading in Hong Kong share market.

Other stock indices that are maintained by the HSI Service Limited are –

  • Hang Seng China AH Index Series
  • Hang Seng China H-Financials Index
  • Hang Seng China Enterprises Index
  • Hang Seng Freefloat Index Series
  • Hang Seng Composite Index Series
  • Hang Seng Total Return Index Series

The total Hang Seng index constituent stocks as of 10 September 2007 are 40. There are four sub-indices of the HSI that were established on January 2, 1985. They were introduced in order to classify the constituent stocks into four distinct segments.

The four sub-indices of the HSI are:

  • Hang Seng Finance Sub-index
  • Hang Seng Utilities Sub-index
  • Hang Seng Properties Sub-index
  • Hang Seng Commerce & Industry Sub-index

Launched on 3rd October 2001, the Hang Seng Composite Index Series targets to represent the Hong Kong stock market performance. It comprises of 200 companies depending upon the market capitalization. The enlisted 200 companies of Hang Seng Composite Index Series represent the 97% of the total Hong Kong stock market capitalization.

The formula for the calculation of Hang Seng Index is:

Current Index =

{(? [P (t) x IS x FAF x CF]) / ? ([P (t-1) x IS x FAF x CF])} x Yesterday’s closing index.

Where P(t) = Current price at day t
P(t-1) = Closing price at day (t-1)
IS = Issued Shares
FAF = Freefloat-adjusted Factor, 0?FAF?1, adjusted every six months
CF = Cap Factor, 0?CP?1, adjusted every six months

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Last Updated on : 23rd June 2015

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