SHANGHAI, June 19 (Xinhua) -- The Shanghai Stock Exchange (SSE) announced Friday that it will adjust the calculation methodology of the benchmark Shanghai Composite Index to better reflect market performance.
From July 22 this year, the index will include stocks listed on China's Nasdaq-style sci-tech innovation board, known as the STAR, to increase the weighting of emerging technology industries and therefore reveal structural changes in the Shanghai market, according to the SSE.
The adjusted index will also include red chip companies, or companies registered overseas but operating on the Chinese mainland, to be listed on the Shanghai market by issuing the China Depositary Receipts (CDRs), said the stock exchange.
Under the new calculation scheme, newly listed stocks in the Shanghai market shall be included in the index one year after debut, while new stocks that rank among the market's top ten in terms of daily average market value will be included three months after their debut.
This marks a significant extension from the current 11 trading days, which is believed to help enhance the stability of the index while encouraging long-term and rational investment, said the SSE.
For stocks already included in the index, they will be removed from the calculation if they receive a risk warning from the stock exchange and will be re-included when the warning is revoked, it said.
In a separate statement Friday, the SSE unveiled the first index of the STAR board to timely reflect the stock performance on the board, which has just celebrated its one-year anniversary of inauguration this month.
The new index will have a base value of 1,000 points, and its base date is set at December 31, 2019. The historical performance of the index will be released on July 22 after the market close, while real-time performance will become available on July 23.
The STAR market was designed to support companies in the high-tech and strategic emerging sectors, easing listing criteria while adopting higher requirements for information disclosure.
By the end of May, there have been 105 companies listed on the STAR market, with a total market value of 1.6 trillion yuan (about 225.6 billion U.S. dollars), according to the SSE. Enditem
