What is the Hang Seng Index (HSI)?
How Does the Hang Seng Index (HSI) Work?
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 Does the Hang Seng Index (HSI) Matter?
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.