Beijing DeepZero Technology and Baidu will be added to the HKEX Tech 100 Index on September 14 after meeting the requirements for fast entry, according to Hang Seng Indexes Company, a subsidiary of Hong Kong Exchanges and Clearing.
Hang Seng Indexes Company made the announcement on Tuesday, confirming that the two Hong Kong listed companies had qualified for inclusion under the index’s fast entry mechanism. Their inclusion will take effect after the Hong Kong stock market closes on Friday, with the changes becoming effective on September 14.
The move brings two technology focused companies into one of Hong Kong’s major technology themed market benchmarks at a time when investors continue to look for exposure to companies operating in areas linked to technological development and innovation.
Two Companies Meet Fast Entry Requirements
The decision covers Beijing DeepZero Technology, listed under stock code 2723, and Baidu, listed under stock code 9888.
Both companies satisfied the conditions required for entry through the fast entry mechanism. Rather than waiting for a regular index review, qualifying companies can be added when they meet the relevant requirements established for the benchmark.
The change will be implemented after the close of trading on Friday. Investors will therefore see the two companies reflected in the index from September 14.
Index changes can matter to companies because inclusion places their shares within a benchmark followed by investors, fund managers and other market participants. It can also affect funds and investment products that track or use the index as part of their investment strategies.
For the two companies, joining the HKEX Tech 100 Index puts their securities within a group of major Hong Kong listed companies selected for their connection with technology related themes.
What the HKEX Tech 100 Index Tracks
The HKEX Tech 100 Index was created to represent the performance of 100 Hong Kong listed company securities with the largest market capitalisation among companies that have a strong connection with technology sector themes and meet the eligibility requirements for trading through Southbound Stock Connect.
Market capitalisation refers to the total market value of a company's outstanding shares. It is widely used to assess the size of listed companies and plays an important role in determining their representation in many stock market indexes.
The HKEX Tech 100 Index therefore does not simply cover every company associated with technology. Its selection framework combines company size, exposure to technology themes and eligibility for Southbound Stock Connect trading.
That structure gives the index a defined focus while allowing investors to gain exposure to a range of technology related businesses listed in Hong Kong.
Southbound Stock Connect Eligibility
Southbound Stock Connect is an important part of the index selection process because it links investors in mainland China with eligible securities listed in Hong Kong.
Through the trading links, mainland investors can access qualifying Hong Kong listed stocks, while Hong Kong serves as an international financial market connecting companies and investors from different parts of the region.
For companies seeking greater visibility among mainland investors, eligibility for Southbound trading can therefore be significant.
The HKEX Tech 100 Index incorporates this requirement into its selection framework. Companies included in the benchmark must be eligible for Southbound Stock Connect trading while also meeting the index's other requirements.
The inclusion of DeepZero Technology and Baidu means both companies will now form part of the benchmark used to track a group of large Hong Kong listed securities with strong links to technology themes.
Baidu's Position in Hong Kong's Technology Market
Baidu is one of the better known technology companies listed in Hong Kong and operates across several areas of the digital economy.
Its inclusion in the HKEX Tech 100 Index gives investors another way to gain exposure to the company through a technology focused benchmark.
Baidu's Hong Kong listed shares have been available to investors through the city's stock market, while its broader business has given it a significant presence in China's technology sector.
The company's addition alongside DeepZero Technology also reflects the broad range of businesses that can qualify for a technology themed index when they meet the required conditions.
For index investors, the change expands the number of companies represented in the benchmark without altering its basic purpose of tracking large technology related securities listed in Hong Kong.
DeepZero Technology Joins the Benchmark
Beijing DeepZero Technology, identified by stock code 2723, will also enter the index under the fast entry mechanism.
Its inclusion means investors following the HKEX Tech 100 Index will have another Hong Kong listed technology related security to consider as part of the benchmark.
The company's addition comes alongside Baidu rather than as part of a routine review. Hang Seng Indexes Company confirmed that both companies had met the conditions required for fast entry.
The effective date is September 14, following implementation after the market close on Friday.
The timing means that index linked investment strategies can adjust their holdings around the effective date, depending on the rules governing individual funds or products.
Demand for Technology Investment
Hang Seng Indexes Company said the HKEX Tech 100 Index is designed to respond to market demand for more diversified investment opportunities in the technology sector.
Technology companies cover a wide range of businesses, from internet services and artificial intelligence to digital platforms and other technology related activities. A technology focused benchmark allows investors to follow a defined group of listed companies rather than relying on individual stocks.
The index's 100 company structure also provides a broader base than a benchmark built around only a small number of technology stocks.
For investors, diversification can help spread exposure across several companies rather than concentrating investment in one security. The actual performance of the index, however, will continue to depend on the market value and share price movements of its constituent companies.
Index Changes Can Affect Market Attention
When a company enters a major benchmark, the change can attract additional attention from investors who monitor index movements.
Institutional funds and other investment products may also have rules that require them to hold securities represented in particular benchmarks. The effect of an index addition varies according to the products involved and the size of their holdings.
The announcement does not by itself indicate how the share prices of DeepZero Technology or Baidu will respond. Stock prices remain subject to broader market conditions, company developments and investor expectations.
What is certain is that the two securities will become constituents of the HKEX Tech 100 Index following the implementation of the change.
Changes Take Effect on September 14
Hang Seng Indexes Company said the inclusion will be implemented after the market closes on Friday and become effective on September 14.
The change adds Beijing DeepZero Technology and Baidu to the group of securities tracked by the HKEX Tech 100 Index and maintains the benchmark's focus on large Hong Kong listed companies with strong links to technology sector themes.
The index remains tied to Southbound Stock Connect eligibility, giving its constituents a connection to the investment channel between mainland China and Hong Kong.
For investors watching Hong Kong's technology sector, the September 14 adjustment will provide a new benchmark composition that includes both companies. The next practical step for funds and market participants tracking the index is to account for the two additions when the changes take effect.