The Hong Kong Exchanges and Clearing Limited (HKEX) has introduced the HKEX Tech 100 Index, marking its first equity index focused on Hong Kong-listed technology companies. The index comprises 100 leading tech firms, including Tencent Holdings, Alibaba-W, CATL, Xiaomi Group-W, BYD, Meituan-W, SMIC, and WuXi AppTec.

The selection criteria emphasize liquidity and growth potential. Constituents must have an average daily turnover exceeding HKD 20 million over the past six months, alongside either R&D expenditure exceeding 3% of revenue or annual revenue growth surpassing 5% in the last two fiscal years.

The index adopts a free-float market capitalization weighting method, with individual components capped at 12%. It covers six innovative sectors: artificial intelligence, biotech/pharmaceuticals, electric vehicles/autonomous driving, IT, internet, and robotics. Companies listed under Chapter 18A (biotech) or 18C (specialist tech) are also eligible.

Key features include: 1. All constituents qualify for Southbound Stock Connect, facilitating access for mainland Chinese investors. 2. A fast-entry mechanism allows qualifying newly listed stocks to join outside regular semi-annual reviews (June/December).

Compared to the Hang Seng Tech Index (30 constituents), the HKEX Tech 100 offers broader sector representation beyond internet giants, incorporating emerging tech fields. The index's total market capitalization stands at approximately HKD 19.43 trillion, with Tencent (HKD 5.53 trillion), Alibaba (HKD 2.93 trillion), and CATL (HKD 2.31 trillion) as top holdings.

The launch coincides with increased tech IPO activity in Hong Kong. Year-to-date, 97 companies have gone public, raising HKD 231.9 billion - a 237% increase from 2022. Biotech, pharmaceuticals, and digital solution providers dominate new listings.

HKEX has partnered with E Fund Management to develop ETFs tracking the index for mainland investors, further enhancing accessibility. Industry experts note the index provides a comprehensive tool for tracking Hong Kong's expanding tech sector while potentially attracting additional southbound capital flows.