Do you know what Hang Seng Index stocks are? First, the Hang Seng Index selects many constituent stocks as samples, then undergoes a series of processing steps to compile new index futures. So, what exactly are the principles for selecting constituent stocks for the Hang Seng Index in offshore futures?

The Hang Seng Index is compiled by Hang Seng Indexes Company Limited, a wholly-owned subsidiary of Hang Seng Bank in Hong Kong. It selects stocks from 43 listed companies in the Hong Kong stock market as constituent stock samples, using their issuance volume as weights to calculate a weighted average stock price index. The Hang Seng Index reflects the most influential stock price trend in Hong Kong's market movements.

　　Characteristics of Hang Seng Index Stocks:

　　1. Systematic Stock Selection: In 1980, the Hong Kong United Exchange, Far East Exchange, and Gold & Silver Exchange merged to form the current Hong Kong Stock Exchange. Today, there are nearly a thousand stocks listed on the Hong Kong Stock Exchange. After years of exploration, the Hang Seng Index has established fixed rules, largely achieving systematic stock selection.

　　2. High Market Capitalization Share: Although the Hang Seng Index comprises only 33 stocks—less than 10% of all listed stocks—their market capitalization is substantial. For example, in 2005, the market capitalization of the sample stocks accounted for 57% of the total market capitalization of all listed stocks, with trading volume reaching 50%.

　　3. Sector-Specific Indices Reflect Hong Kong’s Overall Economy: To clarify the performance of stocks across different industries, the Hang Seng Index categorized its 33 constituent stocks into four sectors in 1985: finance, real estate, commerce & industry, and utilities. It also introduced a separate financial sector index.

　　4. High Cost Efficiency: Hang Seng Index options contracts provide cost-effective investment opportunities. Investors trading Hang Seng Index options only need to pay a margin, which is a small portion of the contract’s face value, emphasizing cost efficiency.

　　5. Low Transaction Fees: Each Hang Seng Index futures contract is equivalent to high-market-cap stocks, and only a single commission is charged per transaction. Thus, trading costs are relatively low, whether buying or selling. The clearing company also ensures contract fulfillment and registration.