【00388】HKEX partners with Bursa Malaysia to launch "Market Index" – Strengthening ASEAN ties, expanding dual listings, and ETF opportunities

Hong Kong Stock Exchange (00388)
Signed a memorandum of understanding (MOU) with the Malaysian Exchange, as part of the cooperation, to launch a new joint index called the “Hong Kong Stock Exchange-Malaysian Exchange Composite Index,” aimed at enhancing cooperation and connections between the capital markets of the two regions, including collaboration in areas such as dual listings, exchange-traded funds (ETFs), index and investment product development, Islamic financial products, and carbon markets. Dual listings and product development.

Index Components and Investment Opportunities 60/40 Ratio

The “Composite Index” specifically tracks the 60 largest listed companies by market capitalization in Hong Kong and Malaysia, structured as follows:

• Component stock distribution: 30 component stocks from each market.
• Weighting ratio: Hong Kong stocks account for approximately 60%, while Malaysian stocks account for about 40%.

It is worth noting that the launch of this index not only enhances liquidity in the primary and secondary markets but also directly aligns with the current issuance conditions of the 60/40 ETF. This means that once issuers launch related ETFs, Hong Kong investors can allocate Malaysian shares through the ETFs.

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Chen Yiting: Attracting International Capital Flows into Asia’s High-Growth Markets

Hong Kong Stock Exchange CEO Chen Yiting pointed out that Southeast Asia is one of the fastest-growing regions in the world, with Malaysia at its core, showing immense potential for development in innovation, consumption, and resources. She emphasized that strengthening connections with Asian markets is a core strategy for the Hong Kong Stock Exchange:

“Against the backdrop of increasing macroeconomic uncertainty, the launch of the joint index marks a new advancement in regional connectivity. We are actively building a diversified asset ecosystem to attract more international capital flows into Asia, bringing tangible benefits to the market.”

Malaysian Exchange: Enhancing Global Visibility and Islamic Finance Advantages

Fad’l Mohamed, CEO of the Malaysian Exchange, stated that internationalization is key to the exchange’s growth. Through collaboration with the Hong Kong Stock Exchange, Malaysia will further enhance its visibility in the global investment landscape.

He mentioned that Malaysia holds a leading position in the Islamic capital market and serves as an important platform for connecting Shariah-compliant investments, helping companies expand into the ASEAN market through the Malaysian gateway. The release of this index represents the first milestone in the implementation of the memorandum of understanding between the two parties.

Future Expansion of Southeast Asian Companies in Hong Kong

Currently, there are 103 Southeast Asian companies listed in Hong Kong, 30 of which are Malaysian companies. The Hong Kong Stock Exchange stated that it will continue to collaborate with partners across Asia to expand product coverage and promote the long-term stable development of the global capital market.

It is noteworthy that the Hong Kong Stock Exchange presented a mini version of its signature “gong” as a souvenir for the collaboration, and Fad’l Mohamed was all smiles when receiving the souvenir.

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