New Financial Indices to Reflect Hong Kong-mainland Financial Integration

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Last updated at: (Beijing Time) Monday, January 20, 2003

New Financial Indices to Reflect Hong Kong-mainland Financial Integration

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A series of free-float indices to be jointly launched by the Standard and Poors (S&P) and the Stock Exchange of Hong Kong( HKEx) in March will cover H shares and have been hailed for its ability to show interaction between the HKSAR and the mainland.

Hong Kong-based Financeasia.com, a regional web-site for financial industry experts, quoted Monday comments made by David Blitzer, the New York-based S&P managing director, that the indices will cover about 25 blue chips on the main board, including the H shares, and shares listed on the Growth EnterpriseMarket (GEM).

Blitzer noted that the existing HSI Freefloat indices exclude H shares and that the new S&P/HKEx indices will offer the point where 'China meets Hong Kong'.

He added that small- and mid-cap indices will follow in the summer, along with a composite index that he hopes will become the institutional benchmark.

S&P brings its experience in supporting index-related products such as derivatives, warrants and exchange-traded funds. "The key is maintaining liquidity," Blitzer says. It also claimed a global consistency in how it categorizes sectors, which it said will enable global investors to easily understand the working with other exchanges such as Tokyo, Toronto and Sydney.

Among the global index vendors, free floats have been deemed necessary, as foreign investors need a benchmark of what they can buy, not just a mere index on every stock.

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