On October 7, the Hang Seng Indexes Company announced the consultation results for the Hang Seng Tech Index, revealing six major reforms that will be implemented in December.

Where the changes begin

The first reform removes the requirement that eligible candidate companies must belong to five designated sectors under the Hang Seng Industry Classification System.

The second reform consolidates and expands existing themes while adding a new frontier technology theme. The revised six major technology themes are: digital platforms and solutions; artificial intelligence; advanced hardware; robotics and automation; cloud; and frontier technology.

The third reform increases the number of technology sub-themes from 16 to 24 to align with the revisions to the six major technology themes mentioned above.

A new selection framework

The fourth reform introduces a grouping mechanism for stock selection, revising the selection universe from main board listed companies to constituents of the Hang Seng Composite LargeCap and MidCap Index.

The fifth reform adopts a dual-group selection mechanism, using market capitalization ranking and revenue growth ranking as separate selection criteria. Non-existing constituents must additionally meet a minimum average daily turnover of HK$100 million over the past three months; constituents selected by revenue growth ranking must have recorded a minimum annual revenue of HK$500 million in each of the most recent two consecutive financial years.

Expanding the constituent pool

The sixth reform increases the number of constituent stocks from 30 to 50, with the top 40 selected by market capitalization ranking and the remaining 10 selected by revenue growth ranking over the past twelve months.