(Bloomberg) -- Hong Kong’s equity benchmark could add more tech and health-care stocks in its quarterly review as the index provider seeks to better embrace the new economy with an expanded member list.
China’s livestreaming giant Kuaishou Technology, drug store operator JD Health International Inc. and electric vehicle maker Li Auto Inc. are among stocks that analysts say could join when Hang Seng Indexes Co. announces a revamp of the 73-member gauge on Friday. The company aims to boost the constituents of the benchmark to 80 and achieve a balanced representation of the stock market.
“Kuaishou could be the last tech name added to the Hang Seng Index before it reaches the 80-member milestone,” Bloomberg Intelligence analyst Marvin Chen wrote in a note.
Following tech, stocks in health care and consumer sectors are in focus, he said. Top candidates include JD Health and Innovent Biologics Inc. given their significant weights in the health-care sector and strong investor interest.
Hang Seng Indexes had initially planned to increase the number of HSI constituents to 80 by mid-2022, but hasn’t set a new timeline after missing that goal. It eventually aims to have 100 members.
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Sentiment for Hong Kong stocks has improved in November as some relaxation of Covid Zero restrictions on the mainland and property support measures soothed sentiment. The Hang Seng benchmark saw a stellar rally of over 20% this month, but remains among the worst performers globally this year.
Brian Freitas, an analyst for independent research platform Smartkarma, also sees Smoore International Holdings Ltd., Trip.com Group Ltd. and Li Auto among potential additions.
There is unlikely to be any deletions as the index provider struggles to add stocks to achieve its target, Freitas added. But if it were to delete, he sees China Life Insurance Co. and Hengan International Group Co. as potential candidates.
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