FTSE Xinhua Index (FXI), the leading China index provider, announced that the company will continue to calculate its suite of indexes for the domestic and international investment community regardless of the expiry of the contract with SSE InfoNet.
Fredy Bush, Co-chairman of FXI, said, “We have other contractual arrangements in place which allow us to calculate indices in China. In addition, obviously, index providers such as MSCI, S&P/CITIC, Dow Jones do not need a contract in China to calculate China equity indices and license investment products. We believe we should be treated in the same way as these index providers.”
“Despite this ruling, FXI’s business operation will not be affected in any way. FXI will move to appeal the case as we maintain our stance that there had been no violation of our contract with SSE InfoNet. We are disappointed at the ruling,” add Bush. “We own our indices and have the right to license others to develop derivatives. FXI regrets that its contract with SSE Infonet will not be renewed, and that strenuous efforts on its part to settle the ongoing court action have not been successful.”
FXI receive the stock data necessary to calculate the China equity indices from a 10-year agreement signed between Shanghai Securities News, a wholly owned subsidiary of Xinhua News Agency and Xinhua Financial Network (a wholly owned subsidiary of Xinhua Finance Limited), the partner company of FTSE in the joint venture FTSE Xinhua Index. The agreement was signed in 2001 in Hong Kong and is governed by HK law.
The overall climate in China is moving toward one of openness and transparency. Chinese Premier Wen Jiabao, speaking at a conference in London in September 2006 reinforced his goal that the Chinese government will ensure foreign media and information providers enjoy reporting freedom and rights. “Information in the areas of commerce, finance and the economy will flow freely without any restrictions,” he confirmed.
Bush said, “China accession to WTO ensures the continuous opening of China’s market and fair competition here. It is of great significance to China being part of the global economy. FXI is merely seeking the right to compete on a level playing field with other organisations and to continue to offer index products to the market.”
Since 2001, FXI has operated within China and internationally, to develop highly successful indexes which meet the needs of investors and have contributed to the ongoing development of Chinese equity markets. It remains committed to continue to playing a part in the healthy development of China's markets.
