The launch of Shenzhen-Hong Kong Stock Connect in early December signaled the continued expansion of access to the Chinese equity market to market participants outside of China. FTSE Russell has introduced the FTSE China A Innovative Enterprises Indexes to reflect the development.
These new indexes measure the fast growing “ChiNext” stocks listed on the Shenzhen Stock Exchange. Viewing these innovative and fast growing firms through the historical lens of FTSE Russell provides an insightful view on the growing scope and scale of this market.
- Since the ChiNext Board was created 7 years ago, listings have grown to 570 and market capitalization has grown to $752 billion.
- ChiNext stocks are now 10% of the total China domestic (A-share) market capitalization.
- 24% of the weight in FTSE Russell’s ChiNext All Cap Index is in Technology stocks, compared to only 5% Technology in the existing FTSE China A All Cap Index. (ChiNext stocks will be incorporated into FTSE China A Indexes in March 2017)
Jessie Pak, Managing Director, Asia, FTSE Russell, said:
“China continues to make good progress in opening its domestic A-share market to international investors and the stock connect programmes have broadened the access to stocks for those investors without QFII and RQFII allocations. The inclusion of ChiNext stocks in our FTSE Global China A Inclusion Indexes reflects the rapid growth of the ChiNext market and enables market participants to better identify and measure the dynamics of this very important market as they consider how and when to implement Chinese equities into their overall investment portfolio”.
With a strong track record in developing China market indexes, FTSE Russell China benchmarks are widely recognised by investors and issuers globally as the leading measure of the China equity market and the natural choice for creating China-focused investment products. The broad spectrum of market benchmarks and well known tradable indexes, cover all sectors and Chinese share types, a range of asset classes and various investment themes including style, dividend yield, and domestic and global exposure indexes.
In 2015, FTSE Russell launched its FTSE Global China A Inclusion Indexes as a transitional tool for investors in preparation for the eventual inclusion of China A-shares in its widely followed global benchmarks. China A-shares remain on the FTSE Watch List for possible inclusion as a Secondary Emerging market.
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Views expressed by Jessie Pak of FTSE Russell are as of January 18th and subject to change. These views do not necessarily reflect the opinion of FTSE Russell or the LSE Group.
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