Asia Index Strategy Hang Seng Indexes Rebalancing Review and Flow Implications (September 2026)

Portfolio Strategy Research 22 August 2026 | 4:00PM HKT

Hang Seng Indexes Rebalancing Review and Flow Implications (September 2026)

What Happened? Hang Seng Indexes Company announced its quarterly index Alvin So, CFA | review results after market close on August 21 (Friday). Starting with this review, Goldman Sachs (Asia) L.L.C.

changes to indexes that do not require Stock Connect eligibility will be generally Timothy Moe, CFA | implemented as usual after market close on September 4 (Friday), while changes to Goldman Sachs (Singapore) Pte indexes requiring Stock Connect eligibility will be implemented one week later, on Terry Chan | September 11 (Friday). Goldman Sachs (Asia) L.L.C.

Constituent Changes: Among major indexes, Hua Hong Grace Semis (1347) and Kinger Lau, CFA | Goldman Sachs (Asia) L.L.C. Weichai Power (2338) will be added to the Hang Seng Index (HSI), bringing the total number of constituents from 93 to 95. There is no change to the Hang Seng Sunil Koul | China Enterprises Index (HSCEI). Within Hang Seng TECH (HSTECH), Shanghai Goldman Sachs International

Iluvatar CoreX Semis. (9903) will replace Tongcheng Travel (780). For the Hang Si Fu, Ph.D. | Seng Composite Index (HSCI), 61/15 stocks will be added/deleted to the universe. Goldman Sachs (Asia) L.L.C.

In aggregate, 2.1%, 1.3%, and 2.7% of the HSI, HSCEI, and HSTECH weights will be Kevin Wang, CFA | adjusted after re-capping and FAF/share changes. Goldman Sachs (Asia) L.L.C.

Index Implications: The proforma index cap is expected to change to US$2,200 billion for HSI (+1.6%), US$1,440 billion for HSCEI (+1.5%), and US$450 billion for HSTECH (-2.6%) after rebalancing and re-capping. Forward 12M P/E and EPS growth (2026–27 CAGR) are expected to change as follows: HSI from 11.1x to 11.2x and 11.5% to 11.6%; HSCEI remains unchanged at 10.0x and 11.8%; and HSTECH from 17.3x to 17.5x and 39.5% to 37.9% (Exhibit 1).

Sector Implications: Tech H/W & Semis (+US$870mn), Software & Services, and Internet/Media (+US$190-230mn each) are expected to see the largest passive buying, while Banks (-US$800mn), Utilities, and Consumer Retails (-US$100-140mn each) may experience the largest outflows (Exhibit 2). In aggregate, the rebalancing could generate over US$7.2bn in gross two-way passive flows.

Stock Implications: Top six stocks in the Hang Seng Family of Indexes expected to see the largest passive net buying flows are: Trip.com/Lenovo (higher FAF), Hua Hong/Weichai (added to HSI), and Tencent/SMIC (re-capping higher), with potential inflows ranging from US$160mn to US$470mn. Stocks likely to see the largest passive outflows include HSBC/Meituan/NetEase/Xiaomi (re-capping lower), Tongcheng Travel (removed from HSTECH), and CCB (removed from HSHYLV & HSI/HSCEI funding), ranging from -US$100mn to -US$520mn (Exhibit 3).

Historical vs. Current Patterns: HSI and HSTECH additions have underperformed the benchmark/deletions pre-announcement, consistent with recent momentum

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Goldman Sachs Asia Index Strategy

rotation dynamics. In contrast, HSCI additions have outperformed, in line with historical patterns. Historically, HSI additions tend to outperform moderately post-announcement before reversing around the effective date, while for HSTECH and HSCI, outperformance typically extends through the effective date (from Exhibit 5).

Southbound implications: HSCI constituent changes typically affect Southbound (SB) eligibility, with stricter listing history, market cap, and liquidity requirements for stocks with WVR status. Historically, SB ownership rose by 2pp within two days after inclusion becomes effective, followed by 9pp over three months, with share prices often rallying beforehand and declining post-inclusion before stabilizing (Exhibit 7).

Exhibit 1: Hang Seng Indexes has announced its quarterly review results, with changes taking effect after market close on September 4 or 11, depending on the index group and Stock Connect eligibility requirements; we estimate the rebalancing could generate over…