A good and representative market index reflects the strength of an international financial centre.
HSI performance has lagged major indices in other key markets including the US, Japan and China. One key reason is the over-concentration of old economy stocks in financial and property sectors amongst the HSI constituents.
The latest revamp in the HSI constituents would enhance the underlying strength of the HK stock market with the growing importance of China companies and their earnings stream going forward.
Turnover velocity has accelerated since the launch of Stock Connect and increasing number of secondary-listing of ADR and Chinese centric stocks would further enhance both market turnover and sentiment in 2021.