Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Hang Seng Index

What it is:

The Hang Seng Index is the leading index for shares traded on the Hong Kong Stock Exchange. 

How it works (Example):

Started in 1969, the Hang Seng Index consists of the 45 largest companies that trade on the Hong Kong Stock Exchange, representing about 67% of its total market capitalization

The index is maintained by a subsidiary of Hang Seng Bank. To qualify for selection to the index, a company must be among those that comprise the top 90% of the total market value of all ordinary shares, as well as those that comprise the top 90% of the total turnover on the Stock Exchange of Hong Kong Limited (SEHK). Stocks are classified by the Hang Seng Industry Classification System, designed to reflect stock performance in different sectors. It is a capitalization-weighted index, meaning that the largest firms based on market value carry the greatest weight.  

Why it Matters:

The Hang Seng is the most widely used barometer for the Hong Kong economy. Due to the close integration between the economies of China and Hong Kong, the Hang Seng also indicates market fluctuations in China.