Hong Kong’s tech indices pivot to AI: MiniMax, Zhipu join Hang Seng Tech Index while HKEX Tech 100 reshuffles

A revised tech-focused index is set to begin trading on 15 June after the Hong Kong Exchange (HKEX) swapped seven constituents in what is viewed as a strategic move to build out the benchmark’s exposure to the fast-growing AI sector.

Deepexi Technology, Time Interconnect Technology, Hesai Group, Beijing Geekplus Technology, TransThera Sciences (Nanjing), CaoCao and Yangtze Optical Fibre and Cable will replace China Ruyi Holdings, TravelSky Technology, Livzon Pharmaceutical Group, Maoyan Entertainment, HealthyWay, SY Holdings Group and Hygeia Healthcare Holdings in the Hong Kong Exchange (HKEX) Tech 100 Index, according to the bourse.

Launched in December 2025, the HKEX Tech 100 Index tracks large and mid-cap Hong Kong-listed tech stocks, with this month’s inclusion of AI application and autonomous hardware companies taking place during the gauge’s semi-annual review.

The realignment comes amid a surge in AI stocks driving global equity markets higher. Backed by Chinese AI chipmakers, the Shanghai STAR Market has rallied 30 percent this year while Taiwan’s TWSE and Korea’s Kospi have returned more than 50 percent and 90 percent respectively on continued investor optimism for semiconductor and DRAM memory stocks.

Closer to home, Hong Kong’s major indices have been relatively muted. Fewer AI hardware stocks have limited upside gains while heavier representation of declining internet and consumer discretionary companies, weighed down by cutthroat competition and limited AI monetisation, have hindered performances.

Year to date, Hong Kong’s main and tech indices have registered negative returns, sparking frustration among investors despite the financial hub debuting a number of Chinese AI companies that have skyrocketed since listing.

Opportunity costs for passive fund investors

The index reshuffles should be viewed through the lens of a larger structural shift, extending an ongoing pivot away from traditional property and finance companies that have long characterised Hong Kong’s market landscape, analysts explain.

[See more: With DeepSeek targeting a $50 billion valuation, here are the implications for AI’s spending binge]

Alongside the HKEX Tech 100 rotation on 15 June, starting Monday the Hang Seng Tech Index will add AI startups Knowledge Atlas, the company behind Zhipu AI, and MiniMax to its constituents, a move that will be closely watched by investment professionals given the subsequent impact on capital flows that track benchmark indices.

With the inclusion of Knowledge Atlas and MiniMax, Morgan Stanley estimates that their entry together could attract between $1.3 billion and $1.8 billion in capital inflows. However, for those holding passively managed accounts like exchange-traded funds (ETFs), the rotation comes at a higher valuation cost.

Those two AI stocks in particular have delivered astronomical returns since going public, climbing between four and twelve times their IPO prices. Had both companies been included in the index at the time of their listings, they alone would have reduced overall losses by five percentage points, according to the bank’s calculations.

But because these additions are funded by selling stocks that have contracted, the rotation effectively locks in investment losses, creating a reconstitution drag for passive investors, comments Steve Alain Lawrence, chief investment officer at Balfour Capital Group, in conversation with The Bay.

“By contrast active managers who identified inclusions ahead of the rebalance can benefit from the inclusion bid rather than chasing it afterward,” he explains. However, even with these costs, the reshuffle creates longer term opportunities for Hong Kong.

“These inclusions matter because they open Southbound Stock Connect eligibility, triggering a powerful liquidity flywheel of mainland ETF buying and deeper capital inflows. Index rebalancing is not merely technical adjustments, but a crucial bridge connecting Hong Kong companies to mainland investor capital,” Lawrence describes.

Premium for cash

The realignment coincides amid a premium for holding cash. Together with inflationary pressure from geopolitical risks impacting risk appetite, investors are also raising capital ahead of mega-IPOs like SpaceX, the aerospace company, set to raise $75 billion this month, an amount equal to twice the total value Hong Kong floated in 2025.

[See more: SpaceX’s listing set to take Hong Kong’s IPO crown this year, testing risk aversion]

“There won’t be a blanket withdrawal from Hong Kong, but the market impact will absolutely force a reckoning,” remarked Alan Tse, chief investment officer of AA Capital, speaking to The Bay earlier, noting that investors are expected to become very picky, very fast.

With tech accounting for more than 40 percent of Hong Kong’s IPO fundraising and 43 percent of the listing pipeline, investors believe AI names will become a much bigger driver of Hong Kong’s equity market, reshaping index composition, performance, and fund flows.

But Hong Kong faces the reality that the immediate reconstitution is unlikely to narrow the lead taken by regional tech indices. The STAR 50 index is set to add Moore Threads, a Beijing-based chip maker seen as a direct competitor to Nvidia, and MetaX, boosting the representation of AI tech companies and signalling to investors that the rally may have more upside amid a favourable policy backdrop and rosy outlook for computing power, robots, and large-language models.

“However, should the AI trade unwind, a correction in these pricier stocks would imply that passive investors lose twice: first through the opportunity cost of not owning the stocks on the way up, and then through direct capital losses on the way down,” Balfour Capital’s Lawrence cautions.