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FTSE and HSI Team Up to Launch Asian Equity Indexes

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Index providers FTSE and Hang Seng Indexes (HSI) International are getting together to launch a broad index that tracks the Asian economy (minus Japan), as well as sector indexes that cover the area. The new benchmarks will go live tomorrow.

The co-branded FTSE/Hang Seng Asiatop index will hold the 30 largest Asian companies from China, Hong Kong, Indonesia, Korea, the Philippines, Singapore, Taiwan, and Thailand. They will also launch 11 sector indexes that cover resources, basic industries, general industrials, cyclical, non-cyclical, telecoms, utilities, financials, banks, real estate, and technology.

Officials said Malaysia will be excluded from the index series for the time being due to that country's capital controls and a lack of liquidity.

The new indexes will be float-weighted, and no company may have a weighting over 25%.

"The indexes will help meet the increasingly sophisticated needs of investors in the Asian region for index-related derivative products," said Vincent Kwan, director of HSI International, which maintains the broad index of the Hong Kong economy.

The launch highlights a growing trend of collaboration in indexing as recognized firms continue to leverage their names in co-branded benchmarks. Also, index providers are hungry to carve up emerging markets that haven't been saturated with equity indexes as has happened in the U.S. and Europe.