GF Securities Estimates 38 Firms to Join Stock Connect in September; Tianmu Zhixin Targets Hang Seng Tech
SingTao · 1 SOURCESabout 1 hour ago8 MIN
Summary
GF Securities projects that 38 companies will gain access to Hong Kong's Stock Connect trading mechanism in September, with 37 expected to be formally included through regular quarterly rebalancing on September 7 . The Hang Seng Index Company will release its latest index series review results on August 21 after market close, which investors are closely watching for potential investment opportunities . Historical analysis from GF Securities reveals that Stock Connect inclusion does not reliably drive stock prices higher, with historical rise probabilities of 48%, 46%, and 45% observed one day, one week, and two weeks after inclusion respectively . The firm notes that the primary benefit of inclusion lies in expanded investor reach and potential capital inflows rather than immediate price appreciation . Separately, the Hang Seng Tech Index is undergoing reform consultations, with proposals to expand constituent stocks from 30 to 50 and enhance coverage of emerging technology sectors including artificial intelligence, advanced hardware, and robotics .
Key Points
- The Hang Seng Index Company will publish its quarterly index review results on August 21 after market close, with the changes expected to take effect on September 7
- GF Securities estimates 38 companies will obtain Stock Connect trading qualifications, with 37 expected to be included through regular adjustment
- Companies projected to gain Stock Connect eligibility include Sigex Energy (6656), Deep演Smart (2723),曦智科技 (1879), 德适 (2526), Qunyan Technology (068), Changguang CoreSense (3277), and Zhenjiangkang Medical (2697)
- Historical Stock Connect inclusion data shows modest and inconsistent price performance: 48% probability of rise on day one, 46% at one week, 45% at two weeks, and 48% at one month
- Tianmu Zhixin (stock code 9903) is expected to be included in the Hang Seng Tech Index, with historical patterns showing average 9.9% gains from T-30 to T-10 before inclusion
- The Hang Seng Tech Index reform proposal seeks to expand coverage from 30 to 50 constituents, introducing a dual selection mechanism of 40 market-cap stocks plus 10 income-growth stocks
- AI would be upgraded to a first-level theme under the proposed reforms, with tech sub-themes increasing from 16 to 24 categories
- Simulated reform results show advanced hardware constituents increasing from 5 to 15 stocks, while AI-related stocks would rise from 3 to 6
- Digital platforms and solutions would decrease from 46% to 28% of index weight under the proposed changes, though existing 30 constituents would retain 88.5% aggregate weighting
Why It Matters
The upcoming August 21 index review provides Hong Kong investors with a concrete window to position portfolios ahead of anticipated Stock Connect inflows and potential Hang Seng Tech Index rebalancing, though they should be mindful that historical patterns favor pre-inclusion gains over post-inclusion performance . The proposed Hang Seng Tech Index reforms signal a strategic shift toward broader technology representation, potentially creating new investment benchmarks for AI, advanced manufacturing, and frontier technology sectors that align with Hong Kong's ambition to establish itself as a technology financing hub .
The upcoming August 21 index review provides Hong Kong investors with a concrete window to position portfolios ahead of anticipated Stock Connect inflows and potential Hang Seng Tech Index rebalancing, though they should be mindful that historical patterns favor pre-inclusion gains over post-inclusion performance . The proposed Hang Seng Tech Index reforms signal a strategic shift toward broader technology representation, potentially creating new investment benchmarks for AI, advanced manufacturing, and frontier technology sectors that align with Hong Kong's ambition to establish itself as a technology financing hub .