Hong Kong (AFP)
The Hong Kong Stock Exchange on Monday launched the Hang Seng Tech Index, a new index of thirty major Chinese technology stocks, including Alibaba, JD.com, Tencent, Xiaomi and Meituan Dianping.
Hong Kong has become an increasingly attractive place for Chinese tech companies, coming under tighter scrutiny and restrictions in the United States.
Many have sought listing on primary and secondary listings closer to China as the China-U.S. Trade war escalates and Washington threatens to reduce access to U.S. capital markets .
In early July, e-commerce giant Alibaba announced plans to double-list its financial subsidiary Ant Group in Hong Kong and Shanghai.
Analysts say it could be the second largest IPO in the world after Saudi oil giant Aramco last year.
Thanks to the influx of capital from mainland China, technology stocks have largely "outperformed" the Hong Kong Stock Exchange, which has fallen 12% since the start of the year. If the new index had been launched in January, the return would have been 47% for investors, according to Bloomberg calculations.
Hong Kong's place did not offer a specific index for overseas-listed Chinese tech companies that wanted to be listed closer to their headquarters.
"This new index serves to fill this gap and stimulate capital flows," Castor Pang, head of research at Core Pacific-Yamaichi International Hong Kong, told Bloomberg.
Hong Kong is in a deep recession linked to the Sino-US trade war and months of political turmoil.
The Covid-19 health crisis has worsened the economic situation of the territory as a local "third wave" of contamination recently broke out, triggering new and difficult social distancing measures.
© 2020 AFP