1,099 Mainland Chinese Firms to Debut on S&P Emerging BMI

LI AILIN

(Yicai Global) Sept. 9 — New York-based S&P Dow Jones Indices has thus far included 1,099 companies listed on the Shanghai and Shenzhen stock exchanges in its S&P Emerging BMI.

They will stage their official appearance on the index effective as of opening on Sept. 23, Yicai Global has learned from the company’s press office.

These entrants comprise 147 large-cap (USD2 billion-plus) stocks, 251 mid-caps (USD2 billion-USD10 billion) and 701 small-caps (USD250 million-USD2 billion). Domestically-traded A-shares will have a weight of 6.2 percent in the S&P Emerging GMI, calculated based on a 25 percent initial inclusion factor. China’s entire market (including A-shares, Hong Kong stocks and Chinese concept stocks issued overseas) will have an aggregate inclusion factor that reaches 36 percent.

This round of admission does not, however, encompass shares on Hong Kong’s Growth Enterprise Market. These stocks will only be added in future after consulting with market participants, S&P Dow Jones Indices said on its website.

Yuan assets are becoming increasingly sought after by global investors as China’s capital markets expand their opening, and the global influence of A-shares is on the rise. Alum (MSCI), S&P Dow Jones, and FTSE Russel have all already included A-share factors, leaving S&P Dow Jones Indices the last to do so.

Two main criteria for inclusion apply: the target company’s free float market value must reach USD100 million and its stock must has sufficient liquidity,

Craig Lazzara, global director and managing director of S&P Dow Index’s index investment strategy, told Yicai Global in an exclusive granted in New York two days before the announcement of news of the inclusion.

Editors: Tang Shihua, Ben Armour