Stocks News
- ICBC, China Life to join Hang Seng Index
Date: 12-Feb-2007 Sources: (Shenzhen Daily)
INDUSTRIAL and Commercial Bank of China (ICBC) and China Life Insurance Co. will join Hong Kong's benchmark stock index, underscoring the growing influence of mainland firms on Asia's second-largest exchange.
China's largest lender and its biggest insurer will join the index's other Hong Kong-listed, mainland-incorporated firms, or H shares, March 12 in a widely expected move.
But in a surprise move to make room for an ever-expanding list of such firms on the exchange, HSI Services Ltd., the index's overseer, said Friday it would gradually raise the number of Hang Seng Index components to 50 over time.
HSI Services said it would abolish a cap on H-share firms in the index, now set at five.
Hong Kong in past years has evolved into the favorite capital-raising venue for mainland firms seeking cash to expand or hoping to build a presence on an international market.
'That was a duct tape solution,'said Kent Yau, deputy research director at Core Pacific Yamaichi International (HK).
'Going forward, we should not have quotas for H shares because they're getting more popular and heavily weighted in the market.'
The revision would bring the weighting of mainland plays, which accounted for about 60 percent of the market's total volume at the end of January, to about 33 percent.
'Our objective is to let the Hang Seng Index be market representative. If the number of H shares increases, they should get a bigger representation in the index,'said Vincent Kwan, general manager of HSI Services.
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