By Chrysant Liu

China Securities Index (CSI), a joint venture between China’s main stock exchanges in Shanghai and Shenzhen, officially launched the CSI Cross-Straits 500 index on January 18, the first trading day after the memorandums of understanding (MOU) were signed.

The 500 stocks on the index included 300 stocks from China’s Hushen 300 index, 100 stocks from the CSI Hong Kong100 index, and 100 leading companies from Taiwan’s stock exchange.

CSI will publish the index in Chinese yuan, US dollars, Hong Kong dollars and Taiwan dollars; the 500 companies will have a combined market value of around US$468.5 billion.

Liu zhong, vice manager of China Securities Index, told Asia Asset Management that the index covers 75% of the total market capitalisation of the stock markets in China, Hong Kong and Taiwan, and 53% of the combined trading volume; the shares have a P/E ratio of around 22.18 and a dividend yield of about 1.84%. The representative stocks will be adjusted every six months.

“The CSI Cross-Straits 500 index will become a key investment benchmark and lay the foundations for the development of index-related products and other derivatives,” said Mr. Liu.