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China Securities Index Co., Ltd. (CSI) has recently announced that SSE Consumer 80 Index (SSE Consumer 80), SSE Natural Resource Index (SSE Resource), CSI 300 Cyclical Industry Index (CSI 300 Cyclical) and CSI 300 Non-cyclical Industry Index (CSI 300 Non-cyclical) will be launched on May 28, 2010.
The increasing demand for natural resources due to the sustainable rapid growth in China's national economy in recent years has resulted in the rise in the long-term value of all kinds of resources, which in turn drove the overall upturn in the performances of listed companies in resources sector. Consumption is one of the three engines for China's economic growth. In the backdrop of economic downturn, expanding domestic demand and simulating consumption has turned out to be a crucial measure to invigorate economy as well as an important link in the optimization and transformation of economic growth mode. Furthermore, the government work report in 2010 has listed the expansion of domestic demand as a long-term strategic guideline. From the prospective of securities market, resources and consumption are the long-term focus of the market. According to the published compilation schemes, SSE Consumer 80 selects 80 SSE-listed typical consumption stocks as its constituents from such sectors as discretionary consumption, staples consumption and health care while SSE Resource handpicks 50 SSE-listed typical stocks as its constituents from industries of energy, multi-metal and mining, and agricultural and forestry products. Statistics show that the market capitalization and free float market capitalization of SSE Consumer 80 are RMB1.2406 trillion and RMB652.4 billion, accounting for 62% and 59% of that of SSE-listed stocks of the same type, respectively, while that of SSE Resource are RMB4.3200 trillion and RMB673.2 billion, or 97% and 91% of that of SSE-listed stocks of the same type, respectively.
Both CSI 300 Cyclical and CSI 300 Non-cyclical constituents are selected from that of CSI 300 Index. In accordance with the industry classification of the China Securities Regulatory Commission, the constituents of CSI 300 Cyclical are made up of stocks in CSI 300 Index in five industries with strong cyclical features, namely finance and insurance, mining, transportation and storage, metal and non-metal and real estate, while the constituents of CSI 300 Non-cyclical consist of stocks in CSI 300 Index in other industries. The launch of the above two indices provides investors with a new tool to analyze the CSI 300 Index in terms of cyclical features. Statistics show that by May 5, 2010, the market capitalization of CSI 300 Cyclical and CSI 300 Non-cyclical had hit RMB10.9853 trillion and RMB3.9934 trillion, accounting for 48.47% and 17.62% of that of A shares on the SSE market, respectively, with the free float market capitalization of RMB3.0469 trillion and RMB1.8508 trillion, or 36.25% and 22.02% of that of A shares on the SSE market, respectively.
It is learnt that some fund companies have been developing ETF products based on SSE Consumer 80 and SSE Resource.
