Hang Seng Revamps Benchmark Index to Open Door for Alibaba
- HSI opens to dual class, secondary listings to boost index
- Changes could come into effect during August index review
An electronic screen displaying the Hang Seng Index in Hong Kong.
Photographer: David Paul Morris/BloombergThis article is for subscribers only.
Hong Kong’s Hang Seng Index will include dual class shares and secondary listings, allowing Chinese giants such as Alibaba Group Holding Ltd. into the city’s benchmark to provide a potential boost for passive investors who have for years struggled with lackluster returns.
Hang Seng Indexes Co., announced the long-awaited change on Monday in Hong Kong, a step that will help move the benchmark away from a heavy dominance of financial shares. Dual class and secondary listings will each be subject to a 5% weighting cap, surprising some investors who had been hoping for a 10% weighting for Alibaba, for example.