Bloomberg and Winnie Lee
The compiler of the Hang Seng Index defended its decision to create a quota for Hong Kong firms in the latest overhaul, saying maintaining a local presence in the SAR's most widely followed stock index will continue to be important.
"We are in Hong Kong and we are talking about the Hong Kong stock market," said Anita Mo, chief executive of Hang Seng Indexes Company, in an interview.
"In the Hang Seng Index, we need to preserve the elements for Hong Kong," she added.
The HSI will be enlarged to 80 members by mid-2022 from 55 this month. Of those, at least 20 will be Hong Kong firms. Mo, who succeeded two-decade veteran Vincent Kwan at the helm in September, said a company's business presence in the city would help define whether it is considered a Hong Kong firm -- such as where it derives the bulk of revenues.
The index, on the other hand, slumped more than 600 points as resurgent worries about rising US bond yields hit global shares yesterday.
China and Hong Kong led the pullback. The HSI fell 2.15 percent to 29,236.79. Technology and new-energy stocks led the loss. The Hang Seng Tech Index lost 5.84 percent to 8,819.62.
That saw Meituan (3690) plunge 8.75 percent, Tencent (0700) 4.56 percent, Alibaba (9988) 2.24 percent, JD.com (9618) 3.97 percent and Kuaishou (1024) fell below HK$300, dropping 5.55 percent.
The new-energy sector went down on fears of a reduction in subsidies. That saw China Longyuan Power (0916) plummet 14.6 percent, China Datang Corporation Renewable Power (1798) 14.29 percent and Xinyi Solar (0968) 14.68 percent.
The Shanghai Stock Exchange Composite Index dropped 2.05 percent to 3,503.49 points, and the Shenzhen Stock Exchange Composite Index fell by 2.9 percent at 2,294.67 points.
Investment guru Jim Rogers said he views special-purpose acquisition companies and amateur traders as signs of a stock-market bubble. Rogers predicts the price of safe-haven gold and silver will rise. He is also interested in buying Chinese stocks as they are cheaper than shares in the US market and others.
Meanwhile, Financial Secretary Paul Chan Mo-po expects the southbound bond connect to be launched in the second half.