Hong Kong’s benchmark provider Hang Seng announced it will remove troubled Chinese real estate developer Evergrande from one of its indexes — the China Enterprise index.
The index provider did not provide a reason for the decision to remove Evergrande from the 50-stock China Enterprise index.
The embattled property developer has been snowed under by debt problems, and warned in September that it could default. While the real estate giant has managed to cough up the cash to make some interest payments so far, it’s future still hangs in the balance and S&P Global Ratings said last week it could still default.
Evergrande’s stock dipped 1.44% on Monday morning. Year to date, the stock has plunged more than 80%.
In place of Evergrande, Hang Seng is adding biopharmaceuticals firm Innovent Biologics to the China Enterprise index.
As for changes on the Hang Seng index, China Resources Beer and ENN Energy Holdings will be added to the index in addition to the inclusion of JD and Netease. The latest update increases the number of stocks under the main index to 64, from the current 60 stocks.
Shares of JD jumped nearly 2% on Monday morning, while Netease was up nearly 3%.