Hang Seng Indexes, China Securities Index launch smart index

It's for SH-HK Stock Connect opportunities.

Hang Seng Indexes Company Limited (“Hang Seng Indexes”), Hong Kong's leading index compiler, and China Securities Index Company Limited (“CSI”), an influential index company in mainland China, has announced that they will jointly launch the Hang Seng CSI Shanghai-Hong Kong AH Smart Index (“SHHKSI”) on 17 November 2014.

According to a release from Hang Seng Indexes and CSI, this cooperative effort brings together the brands and expertise of the two index compilers and will put global investors in a better position to capture the investment opportunities arising from Shanghai-Hong Kong Stock Connect (“SH-HK Stock Connect”).

The SHHKSI will cover 50 SH-HK Stock Connect eligible companies with dual listings as A-shares on Shanghai Stock Exchange and H-shares on the Main Board of the Stock Exchange of Hong Kong. The index will include the share class that has a lower relative price.

The SHHKSI aims to provide a benchmark reflecting a price arbitrage strategy that may bring additional returns to investors while the AH price difference is expected to be narrowed after the launch of the SH-HK Stock Connect.

Here's more from Hang Seng Indexes and CSI:

Mr Vincent Kwan, Director and General Manager of Hang Seng Indexes, said: “Hang Seng Indexes is pleased to join with CSI to develop the Shanghai-Hong Kong AH Smart Index.

The Shanghai-Hong Kong Stock Connect will improve the efficiency of the two stock markets and induce more demand on cross-market index products. We will continue to develop more new index solutions to satisfy different market demands.”

Mr Zhigang Ma, Chief Executive Officer of CSI, said: “Launched with the partnership of Hang Seng Indexes, this strategy index rides on the arbitrage opportunities arising from the AH price difference of dual-listed companies in Shanghai and Hong Kong. CSI will continue to develop more indexes to meet investors’ needs in cross-border investments.”

The SHHKSI will be calculated and disseminated real-time at 2-second intervals starting from 17 November 2014.

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