Everything you need to know about HSCEI

The Hang Seng China Enterprises Index is a key stock benchmark that may be of interest to speculators in East Asian markets. Discover more about the H-share index here.

Stocks (1)

What is HSCEI?

The Hang Seng China Enterprises Index (HSCEI) is a stock index reflecting the performance of 50 H-share Chinese mainland securities that are listed in Hong Kong. H-shares represent a class of ordinary share regulated by PRC law but subscribed for and traded in Hong Kong dollars. For distinction, A-shares are onshore listings quoted in yuan renminbi.

The HSCEI is a freefloat-adjusted market capitalisation-weighted index, meaning those companies with the largest market cap are given a larger weighting and may have an outsized influence over the price moves of the entire index. Stocks are eligible for selection on the HSCEI based on a variety of criteria, from turnover requirements to freefloat-adjusted market value.

The HSCEI is overseen by the HIS Advisory Committee, which is responsible for ensuring index reviews are undertaken in accordance with the Index Methodology. Reviews of the index are conducted quarterly.

In March 2021, Hang Seng Indexes announced that the main benchmark would expand to eventually include around 100 companies in the index.

Largest companies listed on HSCEI

Here are the ten largest companies by market capitalisation listed on the HSCEI.

Company

Primary sector

Market weighting

Tencent

Communication services

10.85%

China Construction Bank

Finance

8.26%

Ping An Insurance

Finance

7.06%

Meituan

Consumer cyclical

5.66%

Xiaomi Corp

Communication services

5.14%

Alibaba

Consumer cyclical

5.11%

Industrial and Commercial Bank of China

Finance

4.74%

China Mobile

Communication services

3.77%

China Merchants Bank Co.

Finance

3.02%

Bank of China

Finance  

2.71%

History of HSCEI in recent times

Take a look at the history of the HSCEI since 2011, documenting some of the fundamental drivers that impacted the index’s price movements.

HSCEI price history

Why trade HSCEI with City Index?

Trading HSCEI with City Index means that market practitioners can benefit from competitive pricing, reliable trade execution and innovative technology from a trusted provider.

In terms of trading HSCEI in general, the index allows speculators to take positions on a market that offers an insight into the health of mainland China stocks and therefore the Chinese economy, although stock markets and the economy do not always move synonymously.

In the past, HSCEI shares have traded at lower prices than their equivalent listings on mainland China exchanges, making it possible for discounts compared to the Shanghai or Shenzhen indices. 

Traders can benefit from analyst insight into HSCEI movements through technical and fundamental viewpoints, to inform trade decisions. Also, while the market is less liquid than the A-shares market, it still often results in tight spreads, which in turn will generally mean inexpensive costs to enter and exit trades.

What affects the HSCEI price?

The HSCEI price is affected by a range of factors, including the performance of the largest-weighted HSCEI stocks and specific sectors, macroeconomic events, central bank policies, commodity prices, and more. Here are some of the biggest drivers.

Political influences: The political climate, particularly between the US and China, can be a notable driver of prices across this stock index and others. For example, in June 2018 the HSCEI fell 3% in a day against a backdrop of trade wars when US President Trump asked the US Trade Representative to identify $200 billion worth of Chinese products that would be subject to additional tariffs of 10%.

The fall would continue that year as the relationship between the two largest economies, and the impact of the instability globally, became a talking point. Traders interested in HSCEI should stay on top of the latest news on trade wars and other political influences as this fundamental driver can be significant.

Central bank policies: The monetary policies set by central banks, as well as the anticipation of central bank policies, can impact the HSCEI price. For example, the HSCEI rose 2% in a day in March 2020 on anticipation of global central banks ramping up policy easing to offset economic pressure from the coronavirus outbreak. Some stocks on HSCEI can be sensitive in particular to rate decisions from the US Federal Reserve.

Constituent company performance: The performance of certain companies and industries in the HSCEI can disproportionately impact the price of the overall index based on their substantial weighting. For example, in January 2021 Chinese internet giant Tencent, the largest constituent on the HSCEI, fell over 5% after hitting an all-time high that pushed it close to a $1 trillion valuation. This was enough for market practitioners to observe a corresponding dip in the HSCEI.

How to trade HSCEI on City Index

Trade HSCEI with City Index by following these simple steps and kickstart your market experience today.

Open a HSCEI trading account

Open your HSCEI trading account by filling out our online form and be ready to trade the HSCEI within minutes. Or if you like, you can first prepare for real money trading by opening a demo account and applying your strategy risk-free.

Planning a strategy and identifying an opportunity

It’s now time to plan a strategy and identify a trading opportunity. You may want to use a technical approach, a fundamental approach, or a mixture of both, in order to be fully informed on HSCEI’s potential price moves. Use City Index’s trading news and research section to keep abreast of the latest information that may impact the HSCEI price.

How to start trading

Opening and closing a position is easy once you have your strategy and opportunity planned out. First, search for 'Hang Seng H-share Index' in the 'Search Markets' section on the top left of the City Index Webtrader interface. The market is available through an ETF, which aims to match as closely as possible the performance of the HSCEI.

For a spot contract, simply choose the number of contracts you would like to trade and decide, based on your strategy and analysis, whether to go long or short. You can exit your trade when you see fit, based on fundamental factors, technical patterns and indicators, or a combination.


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