.jpg)
On November 23, the 2023 Index Investment Forum was successfully held. Cai Jianchun, Deputy Party Secretary and President of the Shanghai Stock Exchange (SSE), delivered a speech at the event. Gathering over a hundred institutions, the 2023 Index Investment Forum focused on cutting-edge topics related to index investment and engaged in discussions about innovative trends and the role of index investment in supporting investment-side reforms, thus further facilitating its development.
Cai Jianchun emphasized that the Central Financial Work Conference has called for the high-quality development of finance in the new era. This has led to an acceleration in investment-side reforms to attract more medium to long-term funds, in a bid to leverage the capital market as a hub more effectively. Indices, acting as the "baton" of fund flow and a "stabilizer" of the market, are driving the acceptance and adoption of index investment concepts among a larger number of investors. Guiding incremental funds to continuously enter the market through index products is a crucial step to invigorate the capital market and boost investor confidence, and act as a catalyst for investment-side reforms.
Attendees unanimously agreed that the quality of listed companies has significantly improved in the five years since the implementation of the registration system reform. This has resulted in the availability of numerous high-quality underlying assets for index compilation. In recent years, domestic index investment has experienced vigorous development, driven by macroeconomic structural adjustments, industrial transformation and upgrading, rapid growth in residents' wealth management needs, continuous improvement of the multi-level capital market system, and the sound development of the index product ecosystem. The development of index investment is timely and relevant and offers considerable future development space.
As the reform progresses into a new stage of deepening and implementation, the development of indices is presented with a rare opportunity. The SSE has witnessed the addition of 43 companies with a market value exceeding RMB 100 billion yuan and 76 companies with a market value surpassing RMB 50 billion yuan. The structure of listed companies has become more adaptable to the requirements of high-quality economic development, with the number of high R&D and high dividend companies continuously increasing. The total R&D investment of SSE listed companies has tripled, reaching nearly RMB 1 trillion yuan. The R&D investment of the STAR Market has also approached RMB 100 billion yuan, with the proportion of R&D investment to operating revenue exceeding 10%. The ecosystem for the high-quality development of listed companies has significantly improved. Furthermore, the index system needs to be continuously improved in line with the latest achievements of the registration system reform. This improvement will better serve the strategy of sci-tech self-reliance and self-strengthening and focus on the building of valuation system with Chinese characteristics, catering to the wealth management needs of a wide range of investors. Presently, the market response to indices such as the STAR 100 Index and STAR 50 Index remains positive. The tracking scale of the STAR 100 Index has surpassed RMB 20 billion yuan, and the tracking scale of the STAR 50 Index has reached RMB 145 billion yuan, making it the second-largest broad-based index product in the domestic market. Moreover, the dividend index and central and state-owned enterprise indices have also experienced significant growth in terms of product scale this year. The combined scale of dividend index products has nearly doubled since the beginning of the year, while the scale of central and state-owned enterprise index products has grown by over 30%. These developments provide investors with a wider range of investment tools and contribute positively to invigorating the capital market and boosting investor confidence.
Moving forward, the SSE will rigorously implement the important principles outlined in the Central Financial Work Conference, as well as the decisions and arrangements made by the CPC Central Committee and the State Council. Fully understanding the political and people-centric nature of financial work and keeping in mind the top priorities of the country, the SSE will collaborate with all market participants to focus on the five key areas of technology finance, green finance, inclusive finance, ageing finance, and digital finance. Additionally, it will actively develop an index system with Chinese characteristics and promote index investment. By expediting the building of a high-quality index system with Chinese characteristics, enhancing the index investment ecosystem, and increasing the international influence and competitiveness of domestic indices, the SSE aims to promote index investment to new heights, fully stimulating market vitality, and better contributing to the financial strength of the country.
