Hang Seng overhaul will bring flow of funds to these stocks

[HONG KONG] Stocks including a vaping technology provider and a short-video platform are expected to see the largest passive inflows when Hong Kong's benchmark equity gauge begins a dramatic overhaul.

Consumer and health care firms are poised for the biggest improvement to sector representation when the Hang Seng Index expands its membership to 80 stocks by the middle of next year, according to Goldman Sachs Group and CGS-CIMB Securities International - with market cap coverage for both expected to at least double.

Smoore International Holdings, recent listing Kuaishou Technology and JD Health International are prime inclusion candidates in the coming quarterly reviews, according to the brokerages.

Being added to the Hang Seng Index brings a boost of capital inflows from passive funds tracking the benchmark. Last year Meituan jumped when Hang Seng Indexes Co announced its inclusion in November, and the stock is up 20 per cent since being added.

BLOOMBERG