What's the best definition of the HSI?

The HSI is the Hang Seng Index. It is the benchmark equity index in Hong Kong and is a capitalization weighted index of the 30 largest companies trading on the Hong Kong exchange. These 30 companies cover roughly 65% of the total market capitalization for the Hong Kong Exchange. The index has four subsectors – finance, industry, real estate investment trusts, and utilities. Because of the close ties between Hong Kong and mainland China there are many Chinese firms that are a part of the Hang Seng Index.

How can I trade the HSI?

The Hang Seng is one of the most widely quoted Asian indices, and with daily swings that are often greater than 1% it is an ideal vehicle for regular traders. Because the index trades from 9:30am to 4:00pm Hong Kong time it can be difficult for investors living in Europe and North America to trade the index, unless they are willing to keep unusual hours. It can be well worth the effort though, especially for those who are looking for greater exposure to Chinese companies.

Because the Hang Seng Index is a collection of stocks it can often be influenced by larger macro trends and fundamentals, but it can also be influenced by technical levels as well. Due to the close ties between Hong Kong and China, and the large number of Chinese companies listed on the Hang Seng it is often Chinese economic developments that move the Hang Seng. Fluctuations in the value of the Chinese Yuan can also have an impact on the Hang Seng, and recently the trade disputes between the U.S. and China have also impacted the Hang Seng.

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An Overview of China’s Financial Engine – HSI

With a market cap weighted index of 40 of the largest companies traded to date on the Hong Kong Exchange, the Hang Seng Index (HSI) is one of Asia’s biggest indices. Maintained by the Hang Seng Bank, the HSI has been published since 1969 and is the leader of the HKE, covering 65% of its market capitalization. HSI members are also classified into one of four sub-indices that include the commerce, utilities, properties and finance industries.

The Hang Seng is the most widely quoted barometer for the Chinese stock market and the Hong Kong economy. As Hong Kong’s status is known as a special administrative region of China, there are close ties between their economies and a lot of Chinese companies are listed on the Hong Kong Stock Exchange, still held in majority by the British financial firm HSBC.

Hang Seng Index Trading information

MT4/MT5 Symbol: HSI
Trading Time: 01:15-03:59 & 05:00-08:29 & 09:15-17:45
Country: Hong Kong
Currency: HKD
Exchange: HKE

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Interesting facts about the HS Index

The Hang Seng Index was first published on the 24^th of November 1969 and it is, to this day, the largest indicator of overall market performance in Hong Kong. There are several indices belonging to the Hang Seng indices family, including: the Hang Seng China Enterprises Index, Hang Seng China AH Index Series, Hang Seng China H-Financials Index, Hang Seng Composite Index Series, Hang Seng China A Industry Top Index, Hang Seng Corporate Sustainability Index Series and Hang Seng Total Return Index Series.

The chairman of the Hang Seng Bank, Ho Sin Hang conceived the idea of creating the Hang Seng Index as the “Dow Jones” of Hong Kong. Upon publication, its base of 100 points was set equivalent to the stocks’ total value as of market close on 31 July, 1964. The all-time low this index experienced was 58.61 points on August 31, 1967. Later the base value was established and the Hang Seng passed the 10,000-point milestone on October 18^th, 2007, while reaching its all-time high a few days later, on the 30^th of October 2007, at 31,958.41 points. Another innovation was the 2014 Hong-Kong – Shanghai – Shenzhen Stock Connect, which allows international and Chinese investors to trade mainly A-shares listed on each other’s markets through the 3 respective exchanges, which was followed by a 5000 point increase in the Hang Seng over a 3-month period, and a doubling of the Shenzhen Composite to 3140 over the same period.

Index Composition of the HSI

Top 5 on the Hang Seng Index

Name of Company	Industry	Weight (%)
HSBC Holdings	Financials	10.29
Tencent	Information Technology	9.59
AIA	Financials	8.51
CCB	Financials	8.24
China Mobile	Telecommunications	5.15

Sector Representation in HSI

Sector	Weight (%)
Finance	48.71%
Properties and Construction	11.49%
Information Technology	10.96%
Telecommunications	5.95%
Energy	5.61%

Index Formula

HSI calculation formula

The factors influencing the overall index price of the HSI

As with other indices, many macro and micro-economic factors can influence the Hang Seng Index. As it has a close correlation to the Chinese economic current, the Chinese market has a great and almost immediate impact on the index. One economic shift for example would be the Yuan/Dollar peg being removed not in its entirety, as they will be pegging it to a basket of currencies and not just the USD. The impact of the Yuan devaluation in August 2015 by the People’s Bank of China (PBOC) shook the markets with three consecutive devaluations of the Yuan Renminbi (CNY) remaining 30% the currency lower than its previous value.

With the CNY/USD peg being removed as well as the Yuan devaluation (as explained above) experts are confident these changes did add value to the country as well as boost the economy. These changes did have a direct effect and impact on the Hang Seng Index. Political events have an equal role to play. Even when they are not in direct correlation to the HSI, they do influence index price dynamics. The best example is the announcement of Brexit which led to a 1000-point drop in the Index.

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