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Preparing for Stock Index Futures: Shanghai-Shenzhen 300 Index

by BBelew57 on January 29th, 2008

Preparing for Stock Index Futures: Shanghai-Shenzhen 300 Index

The first Chinese Stock Index Futures will be benchmarked on Shanghai-Shenzhen 300 Index (SHSZ300 Index).

There's a discrepancy between SHSZ300 Index and the Shanghai Composite Index (SHCI).

Domestic market investors are likely to use SHCI as their key frames of reference

for a long time. This might be changed by the launching of the Stock Index Futures.

These two indices differ significantly from each other in terms of calculation methodologies, constituents, IPO procedures and sector weighing; correlation between the two indices might be quite low at times.

The SHSZ300 Index covers 300 key stocks on both Shanghai and Shenzhen markets in all business regions (These are only two stock exchanges in China.).

Generally speaking, these 300 stocks are good quality companies, and also are worth buying for domestic investors.

Most of these 300 stocks are heavy-weight stocks, and the Chinese government is their first priority. They cover more than 60 percent of the total market capitalization.

Today's SHSZ300 Index is 4731 Points, ahead of the SHCI Index at 4419 Points.

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POSTED IN: All about China