China said yesterday it would soon launch a stock index covering 500 firms listed in China, Hong Kong and Taiwan to enhance financial cooperation in the Greater China region.
China Securities Index Co (中證指數公司), established by China’s two bourses in Shanghai and Shenzhen, will start to publish the CSI Cross-Straits 500 Index on Jan. 18, the company said in a statement.
Following the signing of three memorandums of understanding between China and Taiwan in November, “the cooperation in financial sectors across the straits [sic] is now entering a substantial phase,” it said.
The documents — on banking, insurance and securities — are expected to help pave the way for Taiwan’s finance industry to gain greater access to the huge Chinese market and open up the possibility of more investment activity.
The new index “caters to investors’ need to observe and invest in markets in the three places and provides a basic instrument for developing index-related products and derivatives,” the statement said.
A number of domestic and overseas institutions are making “proactive” preparations to develop investment products based on the new index for the Greater China region, it added, without giving more details.
The company will publish the index denominated in yuan, US dollars, Hong Kong dollars and New Taiwan dollars, while the components will have a combined market value of about 3.2 trillion yuan (US$468.5 billion).
It covers 75 percent of the total market capitalization of the stock markets in China, Hong Kong and Taiwan, and 53 percent of the combined trading volume.