Hong Kong Exchanges and Clearing Limited (HKEX) and index compiler Hang Seng Indexes Company Limited (HSIL) jointly launched their first co-branded index on Thursday that tracks the largest Chinese mainland companies in the stock connect program, supporting the development of Hong Kong’s capital market product ecosystem.

The Hang Seng HKEX Stock Connect China Enterprises Index constitutes the 80 largest mainland companies by market capitalization and balanced sector representation listed on the Hong Kong, Shanghai and Shenzhen stock exchanges that are traded on Shanghai-Shenzhen-Hong Kong Stock Connect.

“As mainland investment portfolios are still attractive to global investors, and southbound trading of Stock Connect is the overwhelming choice for entering the mainland market, the cooperation between HKEX and HSIL has become the right partnership at the right time. The two parties will jointly develop the index, adding momentum to Hong Kong’s rapidly growing exchanged-traded fund (ETF) product ecosystem,” HKEX Chief Executive Officer Bonnie Chan Yu-ting said at the index launch ceremony.

READ MORE:  HKEX upbeat on outlook despite profit slump, IPO drought

The HKEX CEO added that this cross-market index will offer global investors a comprehensive and authoritative benchmark to capture growth opportunities in the mainland.

HKEX and HSIL will work together on driving awareness for the new co-branded index, helping to promote Hong Kong as the premier international financial center for mainland-related investments.

“The index provides a new perspective on the mainland market, combines mainland and Asian companies listed in Hong Kong into a composite benchmark, and reflects the growth of cross-border integration promoted by various capital market connect programs,” Hang Seng Bank Executive Director and Chief Executive Diana Cesar noted.

“In the past three years, overseas exchange-traded products tracking the Hang Seng Chinese Enterprise Index and its related indexes have increased 30 percent, showing strong interest in mainland investment. As the market develops, HSIL’s solutions must also evolve accordingly,” Cesar added.

HSIL Chief Executive Anita Mo Yuen-man said she hopes there would be different products in the market to promote capital flow and help investors seize opportunities in the mainland market.

She revealed that different ETF issuers have inquired about the new index, and it is expected that ETFs tracking the index will be launched in future.

READ MORE: Hong Kong stock exchange to open office in Riyadh in 2025

Meanwhile, at the index launch ceremony, the HKEX CEO described Vice -Premier He Lifeng’s three suggestions for Hong Kong as a shot in the arm for the city.

On Tuesday, the vice-premier delivered a keynote speech at the Global Financial Leaders’ Investment Summit organized by Hong Kong Monetary Authority, recommending that Hong Kong should deepen financial reform and innovation, expand financial openness and cooperation, and further align itself with national development goals to cement the city’s status as a world financial center.  

“The Hong Kong Stock Exchange has always been focusing on the development of these three areas. The results have been gradually seen, and the recognition of the central government is encouraging and a very positive message,” Chan said.