A new stock index focused on Chinese tech giants has been launched from the Hong Kong stock market.
The Hang Seng Tech index was released on Monday and includes Internet giants such as Tencent, Alibaba and JD.com.
It will contain 30 of the largest technology companies listed in Hong Kong, which are among the largest companies in the world.
The new index comes when Chinese tech companies are subject to greater scrutiny in the United States, with many looking for listings in both Hong Kong and China.
Jack Ma, the billionaire founder of Alibaba, recently announced plans to list its financial group affiliated with Ant Group in Hong Kong.
Alibaba, NetEase and JD.com are three technology giants that recently listed in Hong Kong amid growing tensions between the United States and China. They are included in the new Hang Seng Tech Index.
The Ant group is described as the most valuable unicorn in the world, a start-up that has grown to over $ 1 billion (£ 778 million).
Once listed publicly, it should also move to the index.
Ant Group, a financial technology company (fintech), also wants to list on the Chinese technology-centric Star stock market while avoiding a listing on the US stock market.
Analysts say the Hang Seng Tech index will attract investors to other Hong Kong tech stocks and look beyond the more well-known Hang Seng index dominated by banks, real estate companies and energy companies.
"The new index aims to compete with Nasdaq on the US market for Chinese tech giants," said Bruce Pang, head of macro and strategic research for China Renaissance Securities.
The Hang Seng Tech index will follow Hong Kong-listed companies that have high commercial exposure to selected technology themes, including the Internet, fintech, cloud, e-commerce and digital businesses.
"The Chinese government wants its technology companies to be able to access foreign capital. Therefore, an index in Hong Kong would be better for that purpose," added Tianjun Wu, deputy economist at the Economist Intelligence Unit.
What does this mean for investors?
Investment experts say it will be cheaper for investors who want to buy Hong Kong-listed Chinese technology companies now that they have their own index.
There is a huge appetite for tech stocks like Alibaba and Tencent, which generally performed well during the coronavirus pandemic as more and more people go online for shopping and entertainment.
The new index could trigger the launch of specialized investment funds that monitor these 30 technology stocks, known as Exchange Traded Funds (ETF).
"This is a great new positive addition, which marks the continued growth of the Chinese technological space and its mentality and portfolio share of local and international investors alike," added Andy Maynard, CEO of the investment bank China Renaissance .