Nio, a leading electric vehicle manufacturer, is set to be included in another prestigious Hong Kong stock index, a move that is expected to attract passive investment inflows despite the company’s weak stock performance. The Hang Seng Indexes Company Limited (HSI) is scheduled to announce the results of its semi-annual review of the Hang Seng family of indexes after trading hours on Friday, February 21. The adjustments are set to be implemented on Monday, March 10, as reported by Chinese brokerage CICC.
The upcoming adjustment will impact major flagship indices such as the Hang Seng Index, Hang Seng China Enterprises Index, Hang Seng Tech Index, and Hang Seng Composite Index. According to analyst Liu Gang’s team, Nio is likely to be included in the Hang Seng Index, with JD Logistics, Innovent Bio, and Pop Mart following closely behind. The team’s calculations prioritize market capitalization, taking into account other factors such as the companies’ industry positions.
However, historical data suggests that actual results may vary, as some companies that ranked high in previous forecasts were ultimately not included in the index. The semi-annual deliberations are known to be highly variable, and given the substantial size of passive funds tracking the flagship index, potential constituent changes and fund flows are crucial to monitor.
The current size of ETFs tracking the Hang Seng Index stands at approximately $27.53 billion, with the Hang Seng China Enterprises Index at $5.41 billion and the Hang Seng Tech Index at $18.66 billion, based on data from Bloomberg and Wind.
Nio made its debut on the Hong Kong stock exchange on March 10, 2022, under the ticker symbol 9866. In May 2022, Nio was included in the Hang Seng Composite Index and the Hang Seng Technology Index, signaling its growing presence in the Hong Kong market.
The Hang Seng Index, established in 1969, is a key indicator of the Hong Kong stock market’s performance. The Hang Seng Composite Index, created in 2001, covers the top 95 percent of the total market capitalization of securities listed on the main board of the Hong Kong Stock Exchange.
Despite Nio’s weak stock performance in 2024, with a decline of approximately 53 percent, the company’s inclusion in the Hang Seng Indexes reflects its strategic importance in the market. As the automotive industry continues to evolve, Nio’s innovative approach to electric vehicles positions it as a key player in the global market.
In conclusion, Nio’s potential inclusion in another Hong Kong stock index highlights the company’s growth prospects and market relevance, attracting investor attention and solidifying its position as a leading player in the electric vehicle industry.
