Beijing (PingWest)—The Hong Kong stock market launched a new stock index, the Hang Seng Tech Index on Monday, focusing on Chinese technology giants.
The Hang Seng Tech Index will track Hong Kong-listed companies that have high business exposure to selected technology themes, including the internet, fintech, cloud, e-commerce and digital activities. 30 of the largest tech firms listed in Hong Kong, including Alibaba, Tencent, and JD.com, will be featured in the index.
"The new index aims to rival and beat the Nasdaq in the US market for Chinese tech giants," Bruce Pang, head of macro and strategy research for China Renaissance Securities, told BBC.
The Chinese government wants its technology companies to be able to access foreign capital; thus, an index in Hong Kong would be better to suit that purpose, said the report.
Since the outbreak of the COVID-19 pandemic at the beginning of the year, Hong Kong tech stocks outperformed the more well-known Hang Seng Index, which is dominated by banks, real estate companies, and energy companies.
Hong Kong’s economic outlook is clouded. The coronavirus pandemic has halted the daily influx of mostly mainland Chinese shoppers, hurting retail sales. According to the Fortune, the city’s wider economy contracted 8.9% in the first quarter from year-ago levels, suffering its worst quarter on record and extending the first recession in a decade.
Meanwhile, as Chinese authorities have implemented new security laws on Hong Kong, global companies have to reassess the city's attractiveness as a financial center. But Beijing intends to prop up Hong Kong’s financial system through inflows and a flood of stock listings by mainland companies.