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Hang Seng 50 (HK 50) is one of Hong Kong's stock price index calculated by Hang Seng Index Service.
Among the stocks traded on the Hong Kong Stock Exchange, which is the special administrative area of China, 50 companies with high market capitalization are selected. It is one of the important indicators in the Hong Kong stock market, but it accounts for 70% of the Hong Kong stock market capitalization.
After becoming a British colony in 1842, Hong Kong was occupied from 1941 to 1945, and in 1997 it was returned to China, and now it is a special administrative province of China. It traces a rare history even in a global point of view. Due to the policies of one country and two systems, the legal system and financial system that Hong Kong independently created remain as it is today.
Hong Kong itself is a small city with about half the area of Tokyo. However, in international finance, it is ranked 8th in the world with trade volume in 2015, 7th in the world with foreign assets of Hong Kong banks, The number of new publicly traded shares in the stock market is the world first. It has great influence on the world economy. Even after being returned to China, it has continued to grow steadily.
The Hong Kong economy achieves rapid economic growth after the end of World War II. This economic growth resulted from rapid industrialization. This is related to the fact that migrants from China to Hong Kong at that time increased, and migrants included people involved in industry, commerce and finance. After being returned to China, it is growing economically in a way that is dragged by China's economic growth.
Among the securities that make up Hang Seng 50, the largest market capitalization is HSBC Holdings. It is characterized by a high weight of 15%, followed by 9% in China movement and 7% in China Construction Bank. The focus is on the financial and service sectors, but the constituent stocks also include the resource sector.
Hang Seng 50 is the main index of the Hong Kong stock market, but there are many companies in China that actually constitute companies. Because Hong Kong is a special administrative district of China and is positioned as a window of China, it is no wonder why Chinese enterprises occupy a high weight. However, in the past, considering the history that Hong Kong companies dominated, it shows how the economic growth of China is prominent.
Originally Hong Kong manufacturing industry was underpinning the economy, but since it began to relocate factory in China. Service industries such as trade, finance, transportation and telecommunications have transformed into an industry supporting the Hong Kong economy. This can also be seen from the deviation of the constituent stock of Hang Seng 50.
Hong Kong exports to mainland China. When China's economy is doing well, Hong Kong's exports will also increase, so the economy will be doing well. Hong Kong has been growing economically with China, which has achieved rapid economic growth since the beginning of the 21st century, but recently the economy of China is coming down.
In the future, if the economy of China falls backwards, Hong Kong's economy may also slow down. This will have a deep connection to the many of the companies that make up Hang Seng 50 which are Chinese enterprises. The economic stability in Mainland China is a powerful backbone for Hong Kong's economy.
Hong Kong clearly states that it will develop about four areas of artificial intelligence, bioscience technology, smart city, financial science and technology. Though these technologies require the world's most advanced technology, the Hong Kong Exchanges are ranked third in 2017 in terms of the amount of resources purchased at the financial center, which has advantages in terms of money.
The progress of the four major fields is a field that developed countries are already aware of, but there is the possibility of achieving growth that cannot be defeated by developed countries, thanks to pipes cultivated over the years as a front door for China. If they can show their presence in the four major sectors, it will be a model for other countries and expectation for future economic growth will be stable.
Currently, Hong Kong’s domestic demand is expanding. The reason is that the number of people traveling from the world to Hong Kong is increasing, and the income of residents is increasing due to the economy being favorable. The fact that employment is increasing due to expansion of industry also boosts economic activity. Expansion of domestic demand is an important element in considering the future economy of Hong Kong as it has characteristics that it is hard to be affected by the world economy.
Since the Hong Kong dollar and US dollar are considered pegged, there are strengths to be able to raise funds at low interest rates in Hong Kong. If interest rate hikes are made in the US in the future, there will be a movement to repurchase the money that was flowing in Hong Kong, and if the purchase of US Treasuries comes, the outflow of funds will accelerate and the risk of Hong Kong's market will be stagnant. The economic recovery in the United States may be a negative material for the Hong Kong market.
Hang Seng 50 has deep ties with China and the US economy. Hong Kong's economy is improving if the Chinese economy is doing well, but if the US economy is getting strong and the dollar rises, the economy may reverse. In the future forecast of Hang Seng 50, the read-ahead sense of the economy of the United States and China is important. Also, there is economic growth due to domestic demand now, so we need to be concerned about Hong Kong's industrial development and financial situation, too.