The future growth of companies listed on the Shanghai Stock Exchange (SSE) may be reflected through SSE 380 index, SSE Vice President Liu Xiaodong said at the "Shanghai Multi-layer Blue-chip Market Construction Forum: Corporate Financing, Institutional Investment and SSE Indices" yesterday.
In elaborating on the multi-layer capital market in his keynote speech, Liu stressed that broadly speaking, a multi-layer capital market is supposed to be classified according to risk. The first-tier or low-level market, includes low-risk fixed income products, such as treasury bonds and corporate bonds. The second-tier market is featured by equities, and mainly means a system covering the basic over-the-counter market, SME Board, Growth Enterprises Board and the main board. The third-tier also the highest-level market is what we called derivatives market. "Thus, we should discuss the construction of a multi-layer capital market at these three levels."
Liu also introduced the basic situation of the SSE and its index compilation system. It is learnt that the SSE now boasts 906 listed companies with a total market capitalization of RMB19 trillion, ranked 5th and 6th in the world, respectively. As to the corporate composition, there are both large-scale enterprises with nearly RMB2 trillion market capitalization (i.e. PetroChina Company Limited) and small companies with market capitalization of less than RMB1 billion. Given the multi-level structure, the SSE made a comprehensive and considerate arrangement for its index compilation system. Among the current SSE indices, there are not only SSE 50, SSE 180 and SSE 380 indices, which are divided according to basic market behavior, but also industry indices, such as financial and real estate indices. Generally speaking, SSE 50, SSE 180 and SSE 380 constitute the framework of SSE indices.
Speaking of the SSE 380 index launched at the end of 2010, Liu noted that it is closely related to the construction of a multi-layer capital market. According to him, thanks to its popularity, some fund management firms expressed hope to develop products based on it less than one year after its introduction to the market. As products are usually developed on the basis of an index after one year of its debut, it is obvious that the SSE 380 index has shown strong vitality. He said that the growth of the SSE may be witnessed by the SSE 380 index.
In his closing speech, Liu expressed his belief in the increasing improvement of issuing and listing market, corporate quality and level of marketization. He expected listed companies to enhance competitiveness from the perspectives of both industry and corporate governance.
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Shanghai Stock Exchange Vice President Liu Xiaodong: SSE 380 May Be Growth Indicator Of SSE-listed Companies
Date 27/05/2011