The compiler of Hong Kong’s benchmark Hang Seng Index is proposing sweeping reforms that will increase the presence of mainland Chinese stocks, to reflect the greater numbers of listings of technological firms based across the boundary.

Under the reforms, the Hang Seng Indexes Company would remove requirements for HSI candidates to have a minimum listing history, so newly listed companies could become constituents of the index. The move was expected to speed up the addition of mainland Chinese companies to the HSI.

Other proposals unveiled on Tuesday included raising the number of HSI constituent stocks from 50 to between 65 and 80 to better represent the local market, and cap weightings at 8%, down from the current 10%.

As more sizable new listings from the mainland increased, the HSI could keep around 25 Hong Kong firms as constituents to maintain a level of representation by local companies, the company added.

The selection process for constituent stocks could also be changed, by consolidating the current 12 industries from which constituents were picked into six groups to achieve a more balanced representation of the industries.

The HSI was launched in 1969 with 33 constituent stocks. Since 2007, it has expanded a number of times and now has 50 stocks in its composition.

Some in the financial industry welcomed the proposals. Raising the number of constituents was a reasonable move to reflect latest developments in the market, said Alex Wong, a director at the Ample Finance Group.

Click here for Chinese version

---------------------------------

Apple Daily’s all-new English Edition is now available on the mobile app: bit.ly/2yMMfQE

To download the latest version,

iOS: bit.ly/AD_iOS

Android: bit.ly/AD_android

Or search Appledaily in App Store or Google Play