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"Since initiating this endeavour, Standard & Poor's and CITICS have thoroughly analysed the China A-share market and collected information from the industry via our advisory panel on how to best construct indices for China," said Mr. Glenn Doody, Vice President, Standard & Poor's Index Services Asia. "With the invaluable feedback from leaders in the international and Chinese financial markets, we applied Standard & Poor's robust, global index construction methodology to develop a consistent approach for creating and maintaining the indices, taking into consideration the uniqueness of China's equity markets."
The two indices, the S&P/CITIC 50 and the S&P/CITIC 300, are designed to measure the performance of China's A-Share market. The S&P/CITIC 50 is designed to form the basis for index products while the broad market S&P/CITIC 300 index provides an accurate gauge of the performance of China's A-share universe, which currently contains over 1,200 stocks. Both indices began calculations today and back history will be available shortly.
At a press conference held yesterday, Standard & Poor's and CITICS announced that Harvest Fund Management Co. Ltd, one of the leading fund management firms in China, will launch a domestic mutual fund based on the S&P/CITIC 50, making Harvest the first licensee of the S&P/CITIC indices within Mainland China.
On the business development strategy for the S&P/CITIC indices going forward, Mr. Robert Shakotko, Managing Director for Standard & Poor's Index Services, said, "Standard & Poor's and CITICS will continue to work very closely with the leading players within the financial industry in connection with their efforts to develop products based on the S&P/CITIC indices. This will not only create more choices for retail investors, but will also enhance the overall market liquidity, accelerating the growth of the Chinese equity market."
Mr. Wang Dongming, Chairman of CITIC Securities, further expanded, "CITICS and S&P are the leading brands in the indexing space for the domestic and international markets respectively. The launch of S&P/CITIC 50 and S&P/CITIC 300 will not only accelerate the creation and development of index products in China but will also speed up the internationalization process of the domestic equity market."
All A-share stocks listed on the Shanghai and Shenzhen stock exchanges are eligible for possible inclusion in the S&P/CITIC indices. The largest listed companies, as measured by their float-adjusted market capitalizaion, are first considered for inclusion. The candidate stocks are then screened to ensure they are actively traded on a regular basis and have established track records of operating fundamentals. Selection of a stock for inclusion in an S&P/CITIC index does not reflect an opinion by S&P or CITIC on the investment merits of the company.
The S&P/CITIC indices are market cap-weighted and free float-adjusted. Constituent issues are classified according to the Global Industry Classification Standard (GICSÆÊ) bringing them in line with globally accepted standards used by index providers and investors worldwide.
The indices are maintained by an Index Committee made up of representatives from both Standard & Poor's and CITICS. An advisory panel comprised of QFII members and leaders from China's financial market has been established and convened this February. Going forward, the advisory panel will continue to serve as a direct line of communication between the Index Committee and local index users. For more information about inclusion criteria and index methodology, please visit Standard & Poor's website www.indices.standardandpoors.com
In the initial phase, real-time calculation of the indices will be available at www.citicindex.com , via the Tian Hui satellite information System of Shanghai Securities Information. Ltd, on www.sina.com.cn , and on www.homeway.com.cn . The indices will also be available through other major data vendors shortly.
Company additions to and deletions from an S&P index do not in any way reflect an opinion on the investment merits of the company.
