Large cap and GEM indices to debut March 3
Hong Kong, February 19, 2003 - Following its announcement of five new equity indices for the Hong Kong market in August 2002, Standard & Poor's today released the methodology and constituents for the new S&P/HKEx LargeCap index and S&P/HKEx GEM index, both of which will be officially launched and will begin real-time calculation on March 3.
The remaining three indices, the S&P/HKEx MidCap, SmallCap and Composite indices, will be launched later in the year.
The S&P/HKEx LargeCap index comprises 25 stocks covering approximately 75 per cent of the Hong Kong market. The S&P/HKEx GEM index is designed to represent the Growth Enterprise Market (GEM) and consists of stocks that meet strict liquidity guidelines.
"Standard & Poor's has built relationships with local exchanges across North America, Europe and Asia-Pacific, combining our global indexing capabilities with local market expertise," said Glenn Doody, Vice President, Standard & Poor's. "Together with Hong Kong Exchanges and Clearing (HKEx), Standard & Poor's will offer indices that are representative, liquid and investable, and that are designed to elevate Hong Kong companies as investment opportunities for both local and international investors."
The S&P/HKEx LargeCap index will include large international companies, such as HSBC and China Mobile, listed in Hong Kong. The weight of large companies will be capped to ensure a well diversified and balanced representation of the Hong Kong market. In addition, securities known as Red Chips and H-Shares will also be included in the S&P/HKEx series of indices.
"Recognizing that Mainland China-domiciled companies represent an important part of the Hong Kong market and investor portfolios, Standard & Poor's includes H-Shares in the universe of stocks eligible for the S&P/HKEx indices to fully capture the characteristics of this market," added Mr. Doody.
Mr. Roger Lee, HKEx's Senior Vice President of E-Business and Information Services said, "We are very pleased with the launch of the S&P/HKEx index series which we hope will provide Hong Kong and international market participants with an alternative for investable and benchmark index series covering Hong Kong, Mainland and global companies listed in Hong Kong."
Criteria for index inclusion include market capitalization, liquidity, industry or sector representation, and on-going viability demonstrated consistently by positive earnings. Size measurements will be based on market capitalization. Liquidity measurements will be based on trading activity on the Stock Exchange of Hong Kong. The S&P/HKEx indices are free-float adjusted, highly liquid and sector balanced, and apply the Global Industry Classification Standard (GICS) to each constituent company. The use of GICS enables investors using the S&P/HKEx indices to make sector and industry comparisons with other markets worldwide.
The S&P/HKEx indices will be maintained by an S&P Index Committee comprised of representatives of both Standard & Poor's and HKEx, with the majority of representation from Standard & Poor's. The S&P Index Committee Chairman will be appointed by Standard & Poor's. For more information about inclusion criteria and index methodology, please visit Standard & Poor's website www.standardandpoors.com.
In order to facilitate communication and feedback from local market participants, the S&P/HKEx Index Committee has formed an advisory panel that will meet from time to time to discuss index policy and various industry issues.
Real-time calculation of the indices will be available on Information Page 783 of the HKEx's dissemination system from the index launch on March 3, 2003. By mid April 2003, the new S&P/HKEx indices are planned to replace HKEx's existing All Ordinaries Index (also known as AOI) and Growth Enterprise Index (also known as GEI) for display on Information Pages 788 and 8788. By then, dissemination of the AOI and GEI will be terminated and HKEx will make a separate announcement on the exact date of termination.
Company additions to and deletions from an S&P index do not in any way reflect an opinion on the investment merits of the company.
About Standard & Poor's
Standard & Poor's is a leader in providing widely recognized credit opinions, financial data, analytical research and investment analysis to the global capital markets. With 5,000 employees located in 19 countries, Standard & Poor's is an integral part of the global financial infrastructure. Additional information is available at www.standardandpoors.com.
Founded in 1888, The McGraw-Hill Companies is a global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor's, BusinessWeek and McGraw-Hill Education. The Corporation has more than 350 offices in 33 countries. Sales in 2002 were US$4.8 billion. Additional information is available at http://www.mcgraw-hill.com.
.About Hong Kong Exchanges and Clearing Limited
Hong Kong Exchanges and Clearing Limited (HKEx) is the publicly listed holding company of the Hong Kong stock and derivatives exchanges and their related clearing houses. As of the end of January 2003, HKEx had a market capitalization of US$1.2 billion. It is the authority for the listing of securities in Hong Kong.
HKEx is second only to the Tokyo Stock Exchange in Asia as an international stock exchange, in terms of market capitalization and is tenth largest in the world.
HKEx operates a wholly electronic automatic order matching and execution trading system for securities, and a linked electronic central clearing and settlement system. Settlement is on the second day following a transaction (T+2). Futures and options are also traded on a wholly electronic trading system and all transactions are guaranteed and cleared through a linked electronic system. For more information, please visit HKEx's website at http://www.hkex.com.hk.