Shanghai Stock Exchange to Launch Star Market 50 Component Index in July
...one year after the Nasdaq-esque tech board kicked off trading.
The Shanghai Stock Exchange (SSE) and the China Securities Index (CSI) will publish the Star Market 50 Component Index (Star50C), a market-cap-weighted index, in July 2020 to help investors better assess the performance of the SSE Star Market. SSE and CSI will first publish historical SM50C on July 22 after the market closes and will start to update real-time Star50C from July 23.
Since the launch of the tech board, 105 companies have gone public, with a total market cap of CNY 1.5 trillion (USD 210 billion) as of May 2020. The Nasdaq-style bourse attracted high tech companies and SSE-approved IPO applications on an average base of 2-3 days per case.
The base date of Star50C is December 30, 2019, and the base level is 1,000 points. At the current stage, to be included in the index, a stock should have been freely circulating on the Star Market for at least six months. According to the bourse, when the number of stocks and depositary receipts traded for over 12 months hits around 100-150, the required period will be doubled. More index inclusion criteria can be found here (source in Chinese).
Star50C is the first composite index of the tech board. As of in May, 50 equities included in the index are:
i) representative: samples represented 60% of the total market cap, revenue, R&D expenses, net profit, cash flow from operating activities;
ii) clustered in certain industries: information technology, biopharmaceutical, advanced equipment, and other high-end tech industries;
iii) and 'Star'-featured: high input on R&D. For the index companies, on average, over 13% of revenue goes to R&D expenses.