HKEX (0388) launched its first Hong Kong stock index, the Hang Seng TECH Index, last December. The first exchange-traded fund (ETF) tracking this index, the EFUND HKEX TECH 100 ETF (3456), officially listed today (26th).

Eric Yu, Head of Market at HKEX, and Chief Information Officer Liang Songguang stated in a media interview that the index business will be an important growth engine for HKEX in the future. In the long term, a complete product ecosystem will be established around the TECH 100 Index, including futures, options, and structured products.

Liang Songguang introduced that the "Hang Seng TECH Index" covers 100 companies and is a broad-based index, encompassing six major sectors: artificial intelligence, biotechnology, electric vehicles and intelligent driving, information technology, the internet, and robotics. The constituent stocks must be eligible stocks under the Stock Connect program. This sector is not static and may expand to eight to ten sectors in the future.

He further stated that the index has a rapid inclusion mechanism, allowing representative and eligible new stocks to be included outside of regular adjustments. In the past month, three AI-related stocks have been included through this mechanism, bringing the number of constituent stocks to 103, with the next regular adjustment returning to 100 stocks.

Regarding the requirement for constituent stocks to be eligible under the Stock Connect program, which means they must first be part of the "Hang Seng Composite Index," Eric Yu expressed hope that once the ETF products are approved, they can be included in the Stock Connect, allowing mainland investors to participate; at the same time, mainland issuers can also use this index to issue products in mainland China.

When asked about the differences between the Hang Seng TECH Index and the Hang Seng Technology Index, Liang Songguang emphasized that the design concepts of the two are different. The Hang Seng Technology Index has only 30 constituent stocks, all of which are leading stocks; while the HKEX TECH 100 Index is a broad-based index covering 100 companies, aiming to better reflect market conditions. "If the index only focuses on a few leading companies, it may not fully reflect the market. We are creating a broad-based index to bring liquidity to more companies, rather than concentrating on just a few stocks."

Regarding market concerns about whether the HKEX TECH 100 Index will compete with the Hang Seng Technology Index, Eric Yu responded that there are multiple different indices coexisting in the U.S. market, and the Hong Kong market has over 2,700 listed companies, which can accommodate more indices.

The first ETF tracking this index will be listed today. Eric Yu revealed that discussions are ongoing with various issuers, including mainland issuers, to launch more ETF products, and in the long term, they will study the introduction of futures, options, and structured products.

When asked whether the index business will become a source of revenue for HKEX, Liang Songguang stated that the index can drive the development of various products such as ETFs, futures, and options. In the past year, the trading volume of the ETF market in Hong Kong has doubled, and the revenue generated by the index business includes not only index licensing fees but also income from derivative product trading.

Will there be a launch of a broader index in the future, such as the "HKEX 100 Large Cap Index"? Eric Yu pointed out that the main goal is not to pursue the asset scale of a single product but to drive the liquidity of the entire Hong Kong market. They are studying broader indices, but this is not about replicating existing indices, but rather responding to different investment needs At the same time, he also pointed out that the Hong Kong Exchanges and Clearing (HKEX) is studying the launch of thematic indices, such as those related to mining, but there is currently no specific timetable, hoping for progress soon