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Shenzhen stock boosts samples of benchmark index ahead of HK link

By Vera Ye | May 20, 2015, Wednesday | Online Edition

THE Shenzhen Stock Exchange today expanded the number of constituent stocks in its benchmark index, ahead of the launch of a stock trading link between Shenzhen and Hong Kong bourses.

The expansion boosted the number of sample stocks in the SZSE Component Index to 500, up from the previous 40, according to a statement posted on the exchange’s website today.

The constituent stocks have a combined market capitalization of 13 trillion yuan (US$2.1 trillion), representing nearly 60 percent of the total of Shenzhen-listed shares.  

“The expansion has greatly boosted the representativeness of the SZSE Component Index,” the exchange said in the statement.

The index now covers 199 companies listed on the main board, 211 firms on the SME board for small- and medium-sized enterprises and 90 companies on the ChiNext board, with weightings at 48 percent, 35 percent and 17 percent respectively, according to the statement.

The adjustment increased the weighting of information and technology-related companies to 20 percent from 14 percent while slashed the weighting of financial and property stocks to 14 percent from 31 percent, in a move to better represent the industrial structure of companies listed on the Shenzhen bourse, the exchange said.

The move came ahead of the planned program to allow cross-border stock investment between Shenzhen and Hong Kong exchange, which is expected to be kicked off in the second half of the year.

UBS Securities said earlier that China’s securities regulator is likely to allow overseas investors to trade in stocks tracked by the expanded SZSE Component Index under the trading link.

   

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