According to the index construction rule, the Shanghai Stock Exchange (SSE) has decided to adjust constituents of the SSE 180 Index, SSE 50 Index and SSE Dividend Index. Among them, 18 stocks of the SSE 180 Index will be changed, with Poly Real Estate Group Co., Ltd. (Poly Real Estate) and Datong Coal Industry Co., Ltd., etc. to be added, and Canal Scientific and Technological Co., Ltd. and Shenzhen Expressway Co., Ltd., etc. to be deducted. 5 stocks of the SSE 50 Index will be changed, with Poly Real Estate and Jiangxi Copper Co., Ltd., etc. to be added, and Henan Zhongyuan Expressway Company Limited and Minmetals Development Co., Ltd., etc. to be deducted. 10 stocks of the SSE Dividend Index will be changed, with Jinan Iron & Steel Co., Ltd. and Yunnan Yuntianhua Co., Ltd., etc. to be added, and Laiwu Steel Corporation and Ningbo Bird Co., Ltd., etc. to be deducted. For a detailed adjustment list, please refer to the SSE announcement. The constituents' change will come into effect as of the first trading day in 2007.
This adjustment will enhance index vitality and representation. Statistics show that upon completion of this change, the market capitalization of the SSE 180 Index will cover 78.30% of the total on the SSE, and its floating capitalization 63.12%. The market capitalization of the SSE 50 Index will cover 66.04% of the total, and its floating capitalization 42.92%. The market capitalization of the SSE Dividend Index will cover 19.33% of the total, and 14.35% of its floating capitalization. The 2006 semi-annual reports show that the net profits of the SSE 180 Index, SSE 50 Index and SSE Dividend Index constituents are RMB69.363 billion, RMB52.709 billion and RMB37.973 billion, respectively, accounting for 86.54%, 65.77% and 47.38%, respectively, of the total net profit of listed companies on the SSE. The weighted average earning per share of constituents of the SSE 180 Index, SSE 50 Index and SSE Dividend Index are RMB0.1912, RMB0.1974 and RMB0.2083, respectively, or 37.26%, 41.71% and 49.53% higher, respectively, than the average level of the listed companies on the SSE.
In the past year, the total dividend amount of the SSE 180 Index, SSE 50 Index and SSE Dividend Index constituents has reached RMB59.277 billion, RMB46.218 billion and RMB33.875 billion, respectively, accounting for 84.17%, 65.62% and 48.10% of the total dividend amount of the A share listed companies on the SSE.
After the adjustment, price-earnings ratios of the SSE 180 Index, SSE 50 Index and SSE Dividend Index are 20.89, 20.87 and 14.39, respectively, according to the closing prices on December 7, 2006, or 5.05%, 5.14% and 34.59% lower, respectively, than the average market level.
