In the FTSE/Xinhua China A 50 Index, China International Marine Containers (000039) and BOE Technology Group (000725) are being added as rebalancing additions resulting in the deletions of Jiangsu Expressway (600377) and Torch Investment (000549).
Moreover, the Committee also announced adjustments in the Ground Rules of the index series. Taking into account the declining trading volume of the B share market, the Committee decided to screen out B shares from the FTSE/Xinhua China 25 Index. This new rule will be implemented at the October index review, and eligible constituents for the index will only include H shares and red chips.
For the FTSE/Xinhua China A Share Index Series, the Committee made the Small and Medium Enterprise (SME) Board of the Shenzhen Stock Exchange an eligible market, allowing stocks on the SME Board, in addition to the Main Boards on the Shenzhen and Shanghai stock exchanges, to be included in the A share universe. Moreover the inclusion date of a new issue has been changed from the close of the debut trading to that on the fifth day, in order to avoid irrational price fluctuation during the first few days following initial public offerings. This new rule also allows a sufficient notice for users to make respective adjustments in the index-linked products. The Committee also announced that it would screen out the influenced stocks from the FTSE/Xinhua China A Share Index Series in consideration of the practical investment requirements, which will be implemented at the October index review.
The Ground Rules (please see http://www.ftse.com/indices_marketdata/xinhua/rulebook.jsp for details) are drafted, maintained and interpreted by the independent FTSE Xinhua Index Committee, which is a body of market experts who are responsible for the management of the indices. These principles for inserting and deleting companies at the regular reviews are designed to provide stability in constituent selection and ensure the continuous investability and liquidity of the indices.
An overview of changes is provided in the appendix. Full details of all additions and deletions can be found at http://www.ftse.com/indices_marketdata/xinhua/index_changes.jsp.
