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The Shanghai Stock Exchange (SSE) and China Securities Index Co., Ltd. (CSI) have recently announced that the SSE Medium Enterprise Composite Index, with the code of 000020, will be officially launched on May 12, 2008. The index will reflect the overall performance of medium companies listed on the SSE. The base day of the index is December 28, 2007 and the base point is 1,000.
According to the published construction scheme, such indicators as total capital stock, total assets and revenue will be taken into consideration, and A share companies listed on the SSE will be classified into three sectors: large cap, medium cap and small cap. The SSE Medium Enterprise Composite Index will take all medium cap stocks as constituents.
Thanks to the smooth completion of equity division reform and successive listing of large enterprises, the SSE’s position as the main board blue chip market has been established and consolidated. The large-cap blue chip indices, represented by the SSE 180 Index and the SSE 50 Index, well reflect the main blue chips on the Shanghai market and give full play to their functions. Besides the large-cap blue chips, medium enterprises are another vital group on the SSE. To establish the position of the major exchange for large and medium enterprises, the SSE will continue to commit itself in attracting more medium enterprises. Such an endeavor will be helped with the compilation and publication of the SSE Medium Enterprise Composite Index, which aims to equip investors, listed companies and regulatory authorities with indicators and analysis tools on the overall status of medium enterprises on the Shanghai stock market.
The composite index covers all medium enterprises. Later, the SSE and the CSI will, subject to the market conditions, introduce sub-indices composed of a fixed number of representative medium enterprises, for the purpose of offering underlying indices for indexation investment products and providing platforms for the innovation of trading system.
According to the published classification standard, in the aspect of sheer numbers, large enterprises accounts for about 30% on the Shanghai securities market, while medium enterprises about 50%. But in proportion of the floating capitalization, the large enterprises account for 73.3%, while medium enterprises only about 22.5%. As more large-scale state-owned enterprises including H shares ones and red chips ones as well as a lot of medium enterprises went listing on the Shanghai market, the SSE as a listing hub for large and medium enterprises will be best reflected in the structure: large enterprises are heaviest in market capitalization and medium enterprises are largest in sheer numbers.
