China-Singapore Jingwei client, May 30 (Wu Yihan) In the evening of May 29, the Shanghai Stock Exchange responded to the topic of the recent adjustment of the Shanghai Stock Index compilation method, which is quite concerned about by the market.
The Shanghai Stock Exchange said that the Shanghai Stock Exchange has always been concerned about market concerns. All along, the Shanghai Stock Exchange and China Securities Index Co., Ltd. have followed the development trend of international index compilation methods in a scientific, objective and open attitude, and have conducted in-depth research on the improvement of index functions while continuously consulting market opinions and suggestions. Based on China's investor structure and the unique landmark status of the Shanghai Composite Index, the adjustment and optimization of the index requires careful evaluation and comprehensive consideration.
In the next step, the SSE will fully listen to the opinions of all parties in the market and learn from international best practices when studying the perfect plan for the compilation method of the Shanghai Composite Index. While revising the index characterization function, it should try to ensure a seamless connection with the existing index. Ensure the continuity and stability of the index and maintain the normal trading order.
Recently, Zhu Jiandi, deputy of the National People's Congress and chairman of Lixin Certified Public Accountants, suggested appropriate adjustments to the compilation method of the Shanghai Composite Index. Subsequently, Li Xunlei, chief economist of Zhongtai Securities, published "Shanghai Stock Index Distortion Issues Should Be Given Full Attention", which considered Sex needs to be improved. The Shanghai Composite Index, which has always been called the "big market", has begun to be questioned whether it can truly reflect the actual performance of the "big market". So is the Shanghai Composite Index really "distorted"? How should investors view the Shanghai Composite Index?
New latitude and longitude photos in the Shanghai Stock Exchange data map
Why the Shanghai Composite Index is "distorted"
"The market was 3,000 points ten years ago, and the market was still 3,000 points ten years later." Investors who frequently trade stocks are not unfamiliar with this ridiculous sentence. The broad market refers to the Shanghai Composite Index, which is also a narrow concept of the Shanghai Stock Index. Since the release of the Shanghai Composite Index in 1991, capital market investors have been accustomed to using this index to observe the overall performance of the Shanghai Stock Exchange and even the A-share market.
However, recently, the phenomenon that the Shanghai Composite Index has not risen for a long time has also attracted heated discussions among capital market experts. Li Xunlei, chief economist of Zhongtai Securities, mentioned in the article "The Shanghai Index Distortion Should Be Given Full Attention", the total market value of Shanghai Stock Exchange in 2000 was about 3 trillion yuan, and it reached 35 trillion yuan by the end of 2019. The GDP in the same period increased from 10 trillion Yuan to 99 trillion yuan, both of which are about 10 times the growth, the range is equivalent. Judging from the total market value of the Shanghai stock market, the growth of the economic aggregate is fully reflected, but why does the Shanghai index never rise? In Li Xunlei's view, the reason for this problem is that the representativeness of the Shanghai Composite Index still has room for improvement.
Combining the views of Li Xunlei and most market participants who agree with the "distortion" of the Shanghai Composite Index, it can be found that the above-mentioned people believe that there are two major problems in the way the Shanghai Composite Index is compiled. First, there is an unreasonable time when the new shares are included in the index, and second, there is a problem with the weighting method.
According to the official website of China Securities Index, the Shanghai Composite Index is composed of all stocks listed on the Shanghai Stock Exchange, including A shares and B shares. The index is weighted by the total share capital and reflects the overall performance of the stock prices listed on the Shanghai Stock Exchange. The specific calculation method is to divide the total market value of the sample stocks during the reporting period by the divisor and multiply by 100 to obtain the reporting period index. From January 6, 2007, new shares will be included in the index on the 11th trading day of listing.
What are the problems with this method of compilation? The case of PetroChina is a typical example of people's doubts.
On November 5, 2007, PetroChina was listed on the Shanghai Stock Exchange. The total market value on the first day of listing exceeded 7 trillion yuan, and was included in the Shanghai Composite Index at the price of 39 yuan per share on the 11th day of listing. However, the stock price has now dropped to 4.25 yuan / Share, the total market value is less than 800 billion yuan, and the evaporated market value of more than 6 trillion yuan has obviously dragged down the performance of the entire index. Moreover, since 2014, affected by institutional changes such as new share issuance pricing and the first day of listing, new stock listings have tended to have a daily limit for several consecutive days, and the increase during this period has almost nothing to do with the Shanghai Composite Index. The new stocks will start to fall before being included in the Shanghai Composite Index.
In addition, because the weighting method of the Shanghai Composite Index is weighted by the total market value rather than the market value of weight, large market value companies such as China National Petroleum, most of the shares are held by the state and are not freely circulated in the market, so the evaporated 6 trillion Most of the market value of yuan is not owned by stockholders, but it has a great impact on the performance of the index. Conversely, because the stock price is determined by the exchange of circulating shares, this means that a small number of changes in circulating market value determine China National Petroleum. Changes in total market value.
Regarding the above-mentioned problems, Li Xunlei believes that the regulators can learn from the mature experience at home and abroad, optimize the timing of the new stock calculation for the Shanghai Composite Index, and change the weighting method from the total equity weighting to the free circulating capital weighting and other adjustments.
Do you need to modify the compilation method of the Shanghai Composite Index?
However, it is worth noting that there are some different views on the market on whether to adjust the compilation method of the Shanghai Composite Index.
"I don't think that the current Shanghai Composite Index is 'distorted', because different calculation methods of the index have different focuses, and no one calculation method is perfect. And from the current Shanghai stock market, I think that the overall In line with the performance of the Shanghai Composite Index, we can't say that some stocks such as Maotai have been rising and the Shanghai Composite Index has not risen, it is considered to be distorted. In fact, there are indeed many stocks that have not risen. This is the case for all stocks on average. "Li Shitong, the chief investment adviser of China Development Bank Securities, told the client of Sino-Singapore Jingwei.
In Li Shitong's view, neither the use of freely traded shares to replace the total share capital for weighted average calculations, nor the modification of the timing of new shares included in the index, can fully reflect the true situation of the stock market. "On the one hand, there are actually differences between tradable stocks. Many circulated stocks are not actually circulated in the market because of pledges, or are held by the state; on the other hand, there is indeed a continuous daily limit for new stocks. However, for most investors in the market, when they can actually buy new stocks, it is often after the new stocks continue to rise and fall to the opening plate. At this time, the probability of buying new stocks is a loss, so the index is actually dragged by new stocks. It reflects the investor's investment situation. "
In Li Shitong's view, today's Shanghai Composite Index has been used by investors for many years, and modifying the index will undoubtedly have an impact on people. It is better to introduce a new index than to adjust the way the existing index is compiled. Because the index of different calculation methods reflects different market information, the introduction of several more indexes can also make the information on the market more complete and let people have more references.
In addition, Tu Guangshao, executive director of Shanghai Jiao Tong University Shanghai Institute of Advanced Finance, pointed out: "We generally talk about composite indexes, but internationally we mainly look at sample indexes. The US index, the larger the sample, actually rises more slowly. For example, the Dow Jones index includes Companies have a small sample and continue to adjust, this component index rises quickly; but for example, the S & P 500, it rises relatively slowly. "
Wu Zhi, founder and CEO of Wufu Capital in Singapore, believes that “the index ’s ups and downs are most affected by the companies with the largest market capitalization. This is not a unique shortcoming of A-shares. The impact of the price fluctuations of Apple, Microsoft and other stocks on the S & P 500 index in the US Much higher than other small market value companies. "
"In view of the trend of the Shanghai Composite Index hovering around 3000 points for many years, at this time, if the regulatory department adjusts the Shanghai Index compilation, it may immediately face public opinion questions such as 'replace the thermometer and manually adjust the index'. This is also the regulation. An important consideration for the department, said Dong Dengxin, director of the Institute of Financial Securities at Wuhan University of Science and Technology.
What is the value of the Shanghai Composite Index to investors?
If the Shanghai Composite Index is reorganized, what impact will it have on shareholders? From the perspective of actual economic benefits, the changes in the Shanghai Composite Index will indeed indirectly affect the returns of stockholders through index funds.
In fact, the China Securities Index Co., Ltd. released the Shanghai Stock Exchange Index as early as December 2, 2010. The index is weighted by the market value weighted free circulation market value weighted grading by file method. Overall, the index is compiled The way is more in line with the current call, and it is indeed more "profitable" than the Shanghai Composite Index.
China-Singapore Jingwei survey Wind data found that as of May 29, the Shanghai Stock Exchange Index fell by 4.95% during the year, which was smaller than the 6.48% decline of the Shanghai Composite Index, compared with the closing point of 10 years ago (May 31, 2010 Japan), the Shanghai Stock Exchange Index rose 25.28%, while the Shanghai Composite Index rose only 9.12% over the same period.
However, it should be noted that there are not many funds tracking the Shanghai Composite Index. The China-Singapore Jingwei query Wind data found that among all public funds, currently only the Wells Fargo Shanghai Composite Index ETF, Huitian Fushang Composite Index, Wells Fargo Shanghai Composite Index. ETF links three funds to track the Shanghai Composite Index. Therefore, the impact of the adjustment of the Shanghai Composite Index on investors is mainly in terms of reference value.
In this regard, Li Shitong believes that "in general, we mainly refer to the broad market index as a trend point. When the broad market rises too high, it means that the overall stock market is more likely to fall, and vice versa, and this time The stocks in your hands may also fluctuate according to the overall trend. But it must be mentioned that the return of investors today is more determined by the choice of individual stocks. More and more stocks on the market will go out of the independent market, so from From a strategic perspective, investors should still choose stocks first, and then tactically refer to the market's points. "(Zhongjing Jingwei APP)
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