CITIC Resources Holdings Limited (1205) Is Yet to See Trading Action on Sep 24

September 24, 2017 - By Marguerite Chambers

Shares of CITIC Resources Holdings Limited (HKG:1205) closed at 0.9 yesterday. CITIC Resources Holdings Limited currently has a total float of 7.86 billion shares and on average sees 6.82 million shares exchange hands each day. The stock now has a 52-week low of 0.8 and high of 1.22.

Hang Seng Index: Driving Hong Kong Economy

Hang Seng Index (HSI) is the primary index of equities listed on the Stock Exchange of Hong Kong (SEHK). The index is market capitalization-weighted and float adjusted. As such, it records and monitors the changes of the largest Hong Kong companies. For investors HSI is the main indictor of the performance of Hong Kong stocks. Stocks of CITIC Resources Holdings Limited company can also be found in HSI.

As a free float adjusted index, HSI excludes restricted shares held by company insiders and other strategic investors such as government and venture capitalists because these holdings tend to be inactive. Instead, HSI tracks the performance of stocks freely available for trade.

HSI has 50 constitutes whose combined market cap equates to about 60% of all stocks listed on SEHK. Experts check all stocks from CITIC Resources Holdings Limited. The components of the index are classified under four sectors, sometimes called sub-indexes, for clarity. Sectors in the index include Energy, Material, Utilities and Financials. Energy is the largest sector in the index.

Eligibility for inclusion in HSI

Candidate stock for inclusion in the index must belong to the group of stocks that make top 90% of total market value of common shares. Additionally, the stock must belong to the group that comprises 90% of the total turnover on SEHK.

Though HSI requires that a company should have a listing history of at least 24 months before it can be considered for inclusion in the benchmark index, there are exceptions. For instance, a new stock can be added to the index after only three months if it meets certain strict requirements. Financial performance, stock liquidity and representation of sectors also determine whether or not a stock can be added to the index. Liquidity of CITIC Resources Holdings Limited allows it to be a part of HIS.

HSI is rebalanced quarterly where constituents that fall short of the listing requirements are dropped and eligible constitutes are added. The index is also updated to take care of rights issue, which usually impacts the market capitalization of its components.

The index is operated by a unit of Hang Seng Bank called Hang Seng Indexes Company. Hang Seng Bank is a publicly traded company on SEHK and it is one of the largest by market cap.

HSI was first published on November 24, 1969. However, the index was established years earlier with a base value of 100 points, representing the total value of Hong Kong stocks as of close of market on July 31, 1964. The index sank to its lifetime low of 58.61 points in August 1967. HSI hit the 10,000-point milestone for the first time in December 1993 and notched the 20,000-point milestone in December 2006. The index reached a lifetime high of 31638.22 points in October 2007.

Investor appetite for Hong Kong stocks

Investing in Hong Kong stocks has become hot lately amid an influx of retail investors betting bet on Hong Kong’s bright growth prospects. High corporate governance standards and a rapidly expanding affluent population are two other reasons Hong Kong stocks appeal to a growing number of domestic and international investors. As per CG Watch, a bi-annual report, Hong Kong ranked second with 65 points out of possible 100 points among 12 Asian markets in 2016 corporate governance survey. But Hong Kong ranked first in the last CG Watch report published in 2014. Investors may find reports on CITIC Resources Holdings Limited interested to their attention. Singapore topped the list with 67 points in corporate governance survey for 2016.

More notable recent CITIC Resources Holdings Limited (HKG:1205) news were published by: Reuters.com which released: “CITIC Resources to partner with Japan’s Itochu on oil, gas projects” on June 22, 2016, also Marketwatch.com with their article: “0.91” published on May 12, 2009, Moodys.com published: “Moody’s downgrades CITIC Resources to B1; outlook negative” on March 01, 2016. More interesting news about CITIC Resources Holdings Limited (HKG:1205) were released by: 4-Traders.com and their article: “CITIC Resources Holdings Limited : Discloseable transaction: Acquisition and …” published on January 28, 2013 as well as Businessinsider.com‘s news article titled: “Unprecedented Ruling Forces Former Morgan Stanley Banker To Pay Investors $3 …” with publication date: December 12, 2013.

CITIC Resources Holdings Limited is an investment holding firm principally engaged in the natural resources business. The company has market cap of $7.07 billion. The Firm operates through four business divisions. It has a 15.86 P/E ratio. The Aluminum Smelting segment is engaged in the operation of the PAS, which sources alumina and produces aluminum ingots in Australia.

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