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Standard & Poor's launched its first trial on March 1 to develop A-share indices in China in partnership with a local financial institution with the launch of the S&P/CITIC index series.
The indices, named S&P/CITIC 300 and S&P/CITIC 50, are jointly developed by Standard & Poor's and CITIC Securities Co.
The first one is a benchmark index whose constituents are 300 A-share companies with large capitalization and good liquidity, representing a diversified range of industries, while the second index is more of an investment guide, tracking the movements of the 50 large-capped blue-chips.
The opening of the A-share market will have a far-reaching impact on global investment patterns. A critical need has therefore emerged for a comprehensive benchmark to accurately track the China market, said Robert A. Shakotko, Standard & Poor's Managing Director of Index Services.
Standard & Poor's has used the company's global indexing methodology in constructing the S&P/CITIC indices. A joint venture will be established between the company and CITIC Securities to independently operate the indices, he said.
CITIC Securities Chairman Wang Dongming said the two sides would increase cooperation in the future and develop new products like index funds, exchange-traded funds and index futures.
Harvest Fund Management and Greatwall Fund Management Monday also decided to apply the newly issued indices as a basis to develop their own index funds.
Apart from the indices issued by the two stock exchanges in China, some financial institutions have also developed indices tracking A shares or B shares over the past few years, including the Xinhua/FTSE index series that were jointly developed by Xinhua Financial Network and the FTSE Group.
(China Daily March 2, 2004)
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