Shenzhen Stock Exchange (SZSE) and Shenzhen Securities Information Co., Ltd. recently announced to issue SZSE Medium-and-high Credit Index (Code: 399298, Abbreviation: SZSE Medium-and-high Credit) and SZSE Medium-and-low Credit Index (Code: 399299, Abbreviation: SZSE Medium-and-low Credit) on September 25, 2014. The two indices were designed to reflect the overall operation feature of credit bonds of different credits in Shenzhen Market, and facilitate the continuous development and innovation of indexation investment. Both indices take December 31, 2008 as base day and 1000 point as the base value.
As China’s credit market is undergoing an accelerated dividing stage, with the credit bond market distinctively divided into two markets: medium-and-high credit bonds market and low-credit-but-high-yield bonds market, the investors’ needs for segmented credit bonds are even stronger. Meanwhile, the earning trend of credit bonds in Shenzhen Market is of apparent Shenzhen Market feature, which is more sensitive to the credit risk. SZSE Medium-and-high Credit Index and SZSE Medium-and-low Credit Index, combining the feature and market standard of credit bonds, and intensifying the credit risk management in the index design, are capable of meeting the bond indexation investment needs of investors, who are of different risk preferences.
The corporate bonds of non-ST companies listed on the Shenzhen Stock Exchange are served as SZSE Medium-and-high Credit Index’s and SZSE Medium-and-low Credit Index’s sample space, among which, bonds, whose residual duration exceed one year, and whose are fixed interest or whose interest and principal are paid at one time, are selected as optional sample pool. The investment bonds, whose credit grade above AA+ and below AA+, are selected from the optional sample pool to form the sample for the SZSE Medium-and-high Credit Index and SZSE Medium-and-low Credit Index respectively. The indices adopt the bonds’ issuing volume as weights, and the sample will be adjusted on the first trading date of each month.
As data shows, the earnings of SZSE Medium-and-high Credit Index and SZSE Medium-and-low Credit Index display very noticeable differences, with the accumulated earning of SZSE Medium-and-high Credit Index and SZSE Medium-and-low Credit Index being 30.66% and 40.41% respectively from the base day to the end of August, 2014.
More specific material on the indices can be found on the website of Shenzhen Stock Exchange (www.szse.cn) and the website of CNI Index (www.cnindex.com.cn).