The Shanghai Stock Exchange (SSE) and China Securities Index Co., Ltd. (CSI) have recently announced that the SSE Corporate Governance Index would be officially launched on the first trading day of 2008. The index will comprehensively reflect the trend of the SSE Corporate Governance Sector. The base day of the index is June 29, 2007 and the base point is 1,000. The code of the index is 000019, with the short description of Governance Index.
According to the published index scheme, the constituents of the index are composed of all stocks in the SSE Corporate Governance Sector. At present, the SSE Corporate Governance Sector has 199 constituents. All the constituents have the total market capitalization of RMB12.1245 trillion, accounting for 50.7% of the total market capitalization of A shares on the SSE. Meanwhile, their floating market capitalization is RMB2.9579 trillion, accounting for 54.23% of the total market capitalization of A shares on the SSE.
Based on the "Appraisal Measures of SSE Corporate Governance Sector", the SSE Corporate Governance Sector is finally formed through voluntary application of listed companies, public opinion solicitation, comments by consultancies, primary selection, and examination by the Expert Consultative Committee. The sector will be re-appraised from May to June every year. According to the result of the re-appraisal, the CSI will adjust the SSE Corporate Governance Index in early July. For details of the appraisal measures of SSE Corporate Governance Sector and the compiling method of the index, please access the websites of the SSE ( www.sse.com.cn)) and CSI ( www.csindex.com.cn)).
With the rapid development of China's capital market and an increasing number of institutional investors, market participants have higher expectation for the corporate governance. In 2007, the China Securities Regulatory Commission conducted special activities to promote the corporate governance of listed companies. Following the special activities, the introduction of the index is aimed at further improving the supervision work on the corporate governance of listed companies and offering more underlying products for institutional investors.
By December 18, 2007, the SSE Corporate Governance Index closed at 1,315 points, up 31.5% from the base point.
