Core Viewpoint - The Hang Seng Index Company will announce the results of the Hang Seng series index adjustments on August 22, 2025, with implementation on September 8, 2025. Potential candidates for inclusion include Bank of Communications, Pop Mart, Yum China, Xpeng Motors, Huazhu Group, JD Logistics, and Innovent Biologics, based on market capitalization and industry representation [1][2][3]. Group 1: Index Adjustment Details - The semi-annual review will affect major indices such as the Hang Seng Index, Hang Seng China Enterprises Index, and Hang Seng Tech Index, with significant changes expected due to the large scale of passive funds tracking these indices, estimated at approximately $30.35 billion for the Hang Seng Index, $6.63 billion for the Hang Seng China Enterprises Index, and $26.12 billion for the Hang Seng Tech Index [2][6]. - The adjustment will be based on a new calculation method for the average market capitalization over the past 12 months, focusing on non-suspended trading days, which may impact the inclusion and exclusion of stocks [4][5]. Group 2: Potential Candidates for Inclusion - The potential candidates for inclusion in the Hang Seng Index are estimated based on market capitalization rankings and industry representation, with the following companies identified: Bank of Communications, Pop Mart, Yum China, Xpeng Motors, Huazhu Group, JD Logistics, and Innovent Biologics [3][4]. - Historical data indicates that predictions for index inclusion may not always align with actual results, as seen with Innovent Biologics in previous adjustments, suggesting that non-quantitative factors may influence final decisions [3]. Group 3: Hong Kong Stock Connect Adjustments - An estimated 19 companies are expected to be included in the Hong Kong Stock Connect, while 17 may be removed due to market capitalization and other criteria [4][5]. - Companies listed in both A and H shares may be directly included in the Stock Connect after a price stabilization period, with recent listings such as Sanhua Intelligent Controls and others expected to join [5]. Group 4: Timeline and Trading Implications - The official announcement of the index adjustments will occur after market close on August 22, 2025, with the changes taking effect on September 8, 2025. Active funds may engage in arbitrage based on the results, while passive funds will likely adjust their holdings on September 5, leading to potential abnormal trading volumes [1][6].

Core Viewpoint - The article discusses the upcoming semi-annual review results of the Hang Seng Index series, which will be announced on August 22, 2025, and the potential adjustments to the index constituents that could impact significant passive fund flows [1]. Group 1: Hang Seng Index Adjustments - Potential candidates for inclusion in the Hang Seng Index include Bank of Communications, Pop Mart, Yum China, XPeng Motors, Huazhu Group, JD Logistics, and Innovent Biologics, based on market capitalization and industry representation [2]. - Historical data indicates that actual results may differ significantly from predictions based on market capitalization rankings, as non-quantitative factors may influence the final decisions [2]. Group 2: Hong Kong Stock Connect Adjustments - An estimated 19 companies are expected to be added to the Hong Kong Stock Connect, while 17 may be removed, influenced by the recent changes in the calculation method for average market capitalization [3]. - The new method for calculating average market capitalization now considers the average market value on non-suspended trading days, which may affect the eligibility of certain stocks [3]. Group 3: Inclusion and Exclusion Criteria - The criteria for inclusion in the Hong Kong Stock Connect require companies to meet specific market capitalization thresholds and other conditions, such as being listed for at least six months and having a market cap above HKD 5 billion [4]. - Companies that do not meet the criteria, such as those with market caps below HKD 4 billion or those that are suspended, may be excluded from the Stock Connect [4]. Group 4: Timeline and Market Impact - The official results of the index adjustments will be announced on August 22, 2025, and will take effect on September 8, 2025, with subsequent adjustments to the investable universe for the Shanghai and Shenzhen Stock Exchanges [5]. - Following the announcement, there may be significant trading volume spikes as active funds may engage in arbitrage, while passive funds will likely adjust their holdings to minimize tracking errors [5]. Group 5: ETF Fund Sizes - The article provides data on the sizes of ETFs tracking the Hang Seng Index, Hang Seng China Enterprises Index, and Hang Seng Tech Index, with total assets of approximately USD 30.353 billion, USD 6.629 billion, and USD 26.119 billion respectively [6].

Group 1: Core Insights - UBS has released a forecast report on the adjustments to the Hang Seng Index (HSI) and the Hang Seng China Enterprises Index (HSCEI), with changes expected to be announced on August 22, 2025, and effective from September 5, 2025 [1][2] - The HSI will see an increase in the number of constituent stocks and aims for a market capitalization coverage of at least 50% across each industry group, with the healthcare sector currently below this threshold [2][5] - The weight limit for individual stocks in the HSI will be set at 8%, a change from the previous limits of 5% for secondary listings and 10% for others [1][2] Group 2: Potential Inclusions and Exclusions - Stocks expected to experience capital outflows due to weight limits include HSBC Holdings (5 HK), CCB-H (939 HK), Xiaomi Corp-W (1810 HK), and NetEase Inc (9999 HK) [1] - Potential new inclusions in the HSI include stocks like Giant Biogene (2367 HK), Wuxi XDC (2268 HK), and Pop Mart (9992 HK), with estimated notional trades of $60.86 million, $28.32 million, and $440.66 million respectively [6][8] - Stocks likely to be excluded from the HSCEI include those ranked 61st or lower, with Pop Mart (9992 HK) being a notable potential inclusion [7][8] Group 3: Southbound Stock Connect Implications - The Hang Seng Composite Index serves as a benchmark for the Southbound Stock Connect, with potential new inclusions such as Bank of East Asia Ltd (23 HK) and Jiangsu Zenergy Battery Technology (3677 HK) [10][11] - Stocks that may be removed from the Southbound Stock Connect include Gemdale Properties (535 HK) and Jiumaojiu International Holdings (9922 HK) [12]