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China launches Cross-Straits 500 Index

CHINA will launch an index tracking stocks on the Chinese mainland, Hong Kong and Taiwan on January 18 to speed up introduction of index-based investment products, such as exchange-traded funds based on overseas equity indices.
The CSI Cross-Straits 500 Index will choose 500 stocks as samples - 300 stocks from the CSI300 Index, 100 stocks on the CSI Hong Kong 100 Index and 100 stocks on the Taiwan Stock Exchange, China Securities Index Co said on its Website today.
Market value of the 500 stocks totaled 32 trillion yuan (US$4.69 trillion), accounting for about 75 percent of the total market value in the three markets and turnover accounted for 53 percent. The company will change at most 10 percent of sample stocks every six months.
The index is a basic tool for development of index-based investment products and derivatives, and some institutions have been developing ETFs, which will enable investors to buy or sell shares in an entire benchmark portfolio, according to CSI, a joint venture between the Shanghai and Shenzhen stock exchanges.

The Shanghai Stock Exchange is making efforts to introduce ETFs to track indices constituted by Hong Kong-listed and Taiwan-listed stocks as part of the city's efforts to build itself into an international financial center.


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