Shenzhen Stock Exchange (SZSE) and Shenzhen Securities Information Co., Ltd. recently announced to issue the SZSE Agriculture Comprehensive Enterprises Index (Code: 399669, Abbreviation: SZSE Agriculture) on June 24 2013, in a move to mirror the overall performance of agricultural companies listed on Shenzhen markets and further satisfy the diversified demands for indexing investment in the market. The index takes December 31 2004 as the base date and 1000 points as the base value.
Given the fundamental role of agriculture in the national economy, China’s capital market has been undertaking the vital task to serve “agriculture, countryside and farmers”. The pyramid market structure of SZSE plays an important role in the industrialization and modernization of the country’s agricultural sector. A large amount of outstanding agricultural listed companies have been incubated in the Shenzhen market, with the group size effect manifesting itself gradually. As of the end of May 2013, agriculture-related companies listed on SZSE totaled 115, accounting for 62% in the A-share markets. Total market capitalization and tradable market capitalization of these companies was recorded as CNY876.9 billion and CNY601.2 billion respectively.
It is introduced that A-share stocks of SZSE-listed companies in agriculture-related industries were included in the shortlist of sample stocks for the SZSE Agriculture Comprehensive Enterprises Index with reference to the CNINFO Industry Classification Benchmark. The top 50 were selected as sample stocks from the shortlist ranking by the weighting of average tradable market capitalization and average turnover at the ratio of 2:1.
The SZSE Agriculture Comprehensive Enterprises Index show good market representativeness as indicated by statistics that its sample stocks cover 78.74% total market capitalization and 84.71% tradable market capitalization in all the agriculture-related stocks in Shenzhen markets. Since the base date till the end of May 2013, the index made an accumulative return of 418.93% and an annualized return of 21.61%, outperforming the CNI A Share Index – a mirror of the entire A-share markets – by 187.57% and 7.67%.
More materials on the SZSE Agriculture Comprehensive Enterprises Index can be found on the website of Shenzhen Stock Exchange (www.szse.cn) and the website of CNINFO Index (www.cnindex.com.cn).