Hang Seng Index Company: The Hang Seng Index rose 17.7% over 24 years, recording its first annual increase in 5 years

According to the Zhitong Finance APP, recently, the Hang Seng Index Company released the "Hang Seng Index Company 2024 Year-End Market Summary Report." In 2024, the Hong Kong stock market, represented by the Hang Seng Index (HSI), recorded its first annual increase since 2019. The Hong Kong stocks hit a year-to-date low in the first quarter, rebounded, and rose to a high not seen in over two and a half years, before subsequently retreating. The market's rise coincided with several factors, including the introduction of supportive policies from the mainland and interest rate cuts by the Federal Reserve. In 2024, the HSI rose by 17.7%, while the Hang Seng China Enterprises Index (HSCEI) and the Hang Seng TECH Index performed even better, recording increases of 26.4% and 18.7%, respectively. In terms of mainland-listed and cross-market indices, the Hang Seng Hong Kong Stock Exchange Shanghai-Shenzhen-Hong Kong Stock Connect China Enterprises Index and the Hang Seng A-Share Connect 300 Index rose by 23.7% and 14.3%, respectively.

The HSI Volatility Index and the HSCEI Volatility Index both rose to year-to-date highs in early October, while the Hong Kong stock market also reached its highest level in recent years.

In the Hang Seng Composite Index, large-cap stocks rose by 18%, leading mid-cap stocks (+11%) and small-cap stocks (-0.1%). Among the industry indices in the Hang Seng Composite Index, the information technology sector performed the best, rising by 43.3%, while the healthcare sector was the worst-performing industry, recording a decline of 20.1%.

The HSI Low Carbon Index rose by 19.1%, while the HSI increase was 17.7%. As for the A-share ESG indices, the Hang Seng A-Share Sustainable Development Enterprises Index, the Hang Seng A-Share Connect ESG 50 Index, and the Hang Seng A-Share Connect 300 ESG Index rose by 20.9%, 20.2%, and 19.2%, respectively, outperforming the Hang Seng A-Share Connect 300 Index's increase of 14.3%.

The Hang Seng Shanghai-Shenzhen-Hong Kong Stock Connect Greater Bay Area Composite Index rose by 15.7%. Among the regional, industry, thematic, and factor and strategy classification indices, the best performers were Shenzhen-Dongguan-Huizhou (+23.5%), the financial sector (+23.8%), new economy (+19.3%), and quality growth (+23.4%).

In terms of thematic indices, the Hang Seng Hong Kong Stock Connect Banking and Insurance Index (+29.2%) and the Hang Seng Shanghai-Shenzhen-Hong Kong Stock Connect China New Infrastructure Index (+27.5%) were the best-performing indices among "Hong Kong-listed" and "mainland-listed and cross-market."

In the Hang Seng large and mid-cap single factor index series, the best-performing index was value (all selected +20.4%); while in the Hang Seng A-share single factor index series, the best-performing index was momentum (all selected +13.8%).

As of the end of 2024, the total assets under management of products tracking the Hang Seng Index series passively was approximately USD 75.6 billion (+14.7%). The total assets under management of exchange-traded products linked to the Hang Seng Index, Hang Seng China Enterprises Index, and Hang Seng TECH Index were USD 23.6 billion (+13%), USD 5.1 billion (-6.3%), and USD 19.6 billion (+20.6%), respectively.

Hong Kong-listed

Main Indices

Hang Seng Index, Hang Seng China Enterprises Index, and Hang Seng TECH Index

After a decline of 13.8% in 2023, the Hang Seng Index recorded an increase of 17.7% in 2024.

The Hang Seng China Enterprises Index rose 26.4% for the year, outperforming the Hang Seng Index.

The Hang Seng TECH Index increased by 18.7% in 2024.

Hang Seng Index Constituents

Among the 83 constituents of the Hang Seng Index, 44 rose in 2024. Xiaomi Group - W (01810), Trip.com Group - S (09961), and Meituan - W (03690) performed the best, rising 121.2%, 94.5%, and 85.2% respectively this year.

Volatility Index

The annual high and low volatility of the Hang Seng Index and the Hang Seng China Enterprises Index were 8,139 points and 3,329 points respectively, both higher than the volatility in 2023 (Hang Seng Index: 6,487 points; Hang Seng China Enterprises Index: 2,285 points).

The Hang Seng Index Volatility Index and the Hang Seng China Enterprises Index Volatility Index, which measure the expected volatility over 30 trading days, both rose to their highest levels since March 2023 in October 2024, with the Hang Seng Index Volatility Index exceeding 40 points during this period.

The Hang Seng Index Volatility Index and the Hang Seng China Enterprises Index Volatility Index reached their highest points of the year on October 7, 2024 (Hang Seng Index Volatility Index: 44.5; Hang Seng China Enterprises Index Volatility Index: 48.96), while the lowest points occurred on September 5, 2024 (Hang Seng Index Volatility Index: 18; Hang Seng China Enterprises Index Volatility Index: 20.3).

The trend of the Hang Seng China Enterprises Index Volatility Index is similar.

Hang Seng Composite Index - Market Capitalization Index

In the market capitalization index of the Hang Seng Composite Index, large-cap stocks performed better, recording an increase of 18%.

After a decline of 24.7% in 2023, small-cap stocks became the worst-performing category again this year, falling by 0.1%.

Hang Seng Composite Index - Industry Index

The information technology sector was the best-performing industry (+43.3%), followed by the energy sector (+24.5%) and the telecommunications sector (+20.6%).

The healthcare sector experienced the largest decline, falling by 20.1%.

Mainland Listings and Cross-Market

Major Indices

Thematic Indices

The Hang Seng China Stock Connect New Infrastructure Index fell by 11.1% in 2023 but recorded a 27.5% increase this year.

The Hang Seng Stock Connect Innovative Drug Selected 50 Index decreased by 13.5%.

ESG Index - Hong Kong Listings

The ESG index series listed in Hong Kong is generally divided into two categories: ESG factor integration and positive screening.

In the ESG factor integration series, the Hang Seng National Index ESG Enhanced Index performed the best (+20.4%).

In the positive screening series, the Hang Seng Stock Connect China Central Enterprises ESG Leading Index performed the best (+21.5%).

ESG Index - Mainland Listings and Cross-Market

The Hang Seng A-Share Stock Connect 300 ESG Index rose by 19.2%.

The Hang Seng A-Share Sustainable Development Corporate Benchmark Index increased by 25.5%.

Note: ESG factor integration incorporates ESG factors into the underlying index; positive screening refers to selecting companies with the highest ESG scores as index constituents.

ESG Index - Thematic Indices

The Hang Seng Stock Connect Hydrogen Energy Thematic Index and the Hang Seng Stock Connect Smart and Electric Vehicle Index recorded increases of 2.1% and 1.4%, respectively.