Benchmark compiler Hang Seng Indexes adds tool maker Techtronic to gauge, ejects China Resources Power
- Company reported an increase of 24.6 per cent in net profit for first half of 2018
- It produces electronic equipment for the Milwaukee, AEG, Roybi and Homelite brands
Hong Kong-based maker of Hoover vacuum cleaners and Milwaukee power tools Techtronic Industries will become a constituent stock of the benchmark Hang Seng gauge on March 11, compiler Hang Seng Indexes said on Friday as part of its quarterly review.
Techtronic replaces China Resources Power Holdings, and the total number of the index will remain at 50.
Co-founded in 1985 by Horst Pudwill, the company has been listed on the local bourse since 1990. It produces a lot of electronic equipment for the Milwaukee, AEG, Roybi and Homelite brands and will have a 0.73 per cent weighting on the gauge.
Companies included in the benchmark index find it easier to attract investors. Gordon Tsui Luen-on, managing director of investment company Hantec Pacific, said some passive fund managers would invest in Techtronic in the near term as a result of its inclusion.
“However, the fund flow will not be substantial, as the weighting of the company is not very high. China Resources Power may also face some selling pressure for the same reasons,” he said.
Hoover maker Techtronic looks to US and Vietnam for manufacturing as trade war looms and China costs rise
To make it as a Hang Seng Index component, a stock should normally have a listing history of 24 months on the Hong Kong stock exchange and must be among the companies that constitute the top 90 percentile of the total market cap of the city’s stock universe, based on the average figure of market caps in the past 12 months.
