(Yicai) Dec. 10 -- Hong Kong Exchanges and Clearing has unveiled the Hong Kong Stock Exchange Tech 100 Index, which boasts Chinese tech giants Tencent Holdings, Alibaba Group Holding, and Contemporary Amperex Technology among its constituents.

The Tech 100 Index that launched yesterday includes the bourse’s top 100 tech firms engaged in six innovative industries: artificial intelligence, biotechnology and pharmaceuticals, electric vehicles and intelligent driving, information technology, internet, and robotics. The upper limit of the weighted market capitalization ratio for each constituent stock is 12 percent.

The constituent stocks, which are adjusted every June and December, must have an average daily trading volume of no less than HKD20 million (USD2.6 million) over the previous six-month period, as well as a research and development investment ratio of more than 3 percent and an annual revenue growth of over 5 percent in the previous two years.

“This broad-based index covers multiple innovative industries that are reshaping the landscape of the Hong Kong stock market, highlighting its key role in promoting the development of these emerging industries,” said Bonnie Chan, chief executive officer of Hong Kong Exchanges and Clearing.

The establishment of the index provides investors with an effective and comprehensive investment tool and helps them seize investment opportunities in the technology and emerging sectors, she added.

In addition to the above requirements, constituent stocks need to meet other investment targets, such as market heat and growth certainty for investors, a senior analyst specialized in the Hong Kong stock market told Yicai. Low liquidity indicates low market recognition, and a relatively small proportion of R&D investment may suggest weak technological content, he noted.

The index’s constituent stocks are all included in the Shanghai or Shenzhen-Hong Kong Stock Connect Scheme, so they can meet the investment demands of both domestic and foreign investors, the analyst added.

The total market capitalization of eligible stocks for the index under the Shanghai or Shenzhen-Hong Kong Stock Connect Scheme had exceeded HKD6.3 trillion (USD809.9 billion) as of Sept. 30, accounting for around 12.7 percent of Hong Kong stocks’ total market capitalization, according to data from the HKEX.

“One of the important roles of the index is to introduce corresponding exchange-traded funds in the future, providing investors with more new investment opportunities,” Shen Meng, executive director of Xiangsong Capital, told Yicai.

In fact, the HKEX also announced yesterday that it has signed an agreement with E Fund Management, a major Chinese mainland asset management company, authorizing the latter to launch ETFs tracking the HKEX Tech 100 Index in the Chinese mainland.

This deal will further promote the development of Hong Kong stock-related products in the Chinese mainland and meet the strong demand from Chinese mainland investors to seize investment opportunities from tech firms listed in Hong Kong, Chan said.

The number of tech companies listed in Hong Kong has increased in recent years, covering more diverse categories, the analyst pointed out, adding that the emergence of indexes such as the HKEX Tech 100 Index can offer investors more choices and help raise the amount of Chinese mainland funds flowing into tech stocks in Hong Kong.

Editors: Tang Shihua, Futura Costaglione