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<Research>CICC: BABA-W, HSBC HOLDINGS Weightings in HSI Cut, Shoring Up Passive Fund Outflows
Hang Seng Indexes Company announced the results of the quarterly HSI index adjustments last Friday (21st), which will take effect on Monday, March 10, CICC released a report recapt...
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<Research>CICC: BABA-W, HSBC HOLDINGS Weightings in HSI Cut, Shoring Up Passive Fund Outflows
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Hang Seng Indexes Company announced the results of the quarterly HSI index adjustments last Friday (21st), which will take effect on Monday, March 10, CICC released a report recapturing. This time, the constituents of the HSI were not adjusted. However, due to changes in weightings, the time required for passive capital inflows was the longest for HENGAN INT'L (01044.HK)  -0.600 (-2.746%)    Short selling $13.67M; Ratio 16.494%   , ICBC (01398.HK)  0.000 (0.000%)    Short selling $311.20M; Ratio 8.144%   and HK & CHINA GAS (00003.HK)  -0.060 (-0.862%)    Short selling $36.90M; Ratio 6.845%   . The broker foresaw these stocks to entail passive fund inflows of US$3.15 million, US$94.47 million and US$6.3 million, respectively, with an inflow time of about 0.45 days.

Among the capital outflows, CITIC (00267.HK)  -0.200 (-1.976%)    Short selling $21.80M; Ratio 5.599%   , BABA-W (09988.HK)  -4.200 (-3.556%)    Short selling $2.60B; Ratio 11.170%   (weighting to be reduced from 10.12% to 8%) and HSBC HOLDINGS (00005.HK)  +0.200 (+0.217%)    Short selling $141.28M; Ratio 12.409%   (weighting to be reduced from 8.28% to 8%) had the largest passive capital outflows due to the reduction in weightings. The outflow time was 1.2 days, 0.6 days and 0.5 days respectively, and it was estimated that there would be passive capital outflows of US$25.19 million, US$667 million and US$88.17 million respectively. It was estimated that TENCENT (00700.HK)  -12.300 (-2.409%)    Short selling $915.20M; Ratio 6.481%   would have a passive capital outflow of US$151 million (weighting to be cut from 8.48% to 8%).

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The broker pointed to the influence of leading stocks. Over the past month, the AI craze has prompted a re-evaluation of asset prices in the Chinese and Hong Kong stock markets in particular. Compared to the “924” market of 2024, this round of rally was steered by a more concentrated group of stocks, with a small number of technology growth stocks driving and even determining the index's gains. However, as the Hang Seng family of major indexes limits the weightings of individual stocks to no more than 8%, the broker saw that some stocks (such as Alibaba, Tencent, Xiaomi, etc.) that have recently mushroomed and caused their weightings to exceed 8% after this index adjustment were passively “Reduced” in weightings.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-05-30 16:25.)

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