The Shenzhen Index is a stock index for the Stock Exchange of Shenzhen, China. It tracks the performance of all A-share companies (listed on the Shenzhen Stock Exchange) on the Shanghai-Shenzhen Exchange. The Shenzhen Stock Exchange was founded in 1991 and is the second largest stock exchange in China.
The Shenzhen Index is a market capitalization weighted index, which means that the larger companies in the index have a larger impact on its value. The index is composed of the 500 most valuable A-share companies (like the S&P 500 in the US). The index is divided into ten industry groups representing the different sectors in the economy. The index is also adjusted for free float and liquidity, so smaller, less liquid companies do not dominate the value of the index.
The China Securities Regulatory Commission (CSRC) started publishing the Shenzhen Index in April 1989, using the stock prices from April 1, 1988 as its base. The Base Date was later adjusted to correspond to the implementation of the new unified stock system on July 1, 1991. The Shenzhen Index was given a base value of 100 points to ensure a consistent comparison throughout different eras.
The Shenzhen Exchange publishes the daily closing prices of the Shenzhen Index along with many other indices. This allows investors to easily get access to the performance of various stocks on the exchange. It also allows investors to compare the performance of different sectors of the Chinese economy.
The Shenzhen index is often used as a benchmark to measure the performance of the Chinese stock market. It is also used by investors to track the performance of the companies listed on the Shenzhen Exchange. Because of its focus on smaller companies, the Shenzhen Index can provide investors with an insight into the performance of Chinese middle-market companies that are not represented in the larger and more popular Shanghai Stock Exchange.
One of the major differences between the Shenzhen Index and other indices is that it does not include the performance of listed companies that are listed on both the Shanghai and Shenzhen exchanges. This is because the Shenzhen Exchange is seen as a more risky and potentially more profitable investment opportunity than the larger and more established Shanghai Exchange.
In recent years, the Shenzhen Index has performed well, as the Chinese economy has grown. The rise of e-commerce has also increased demand for Chinese stocks, as many companies have taken to the internet to expand their markets and broaden their reach. As a result, the Shenzhen Index has become increasingly popular as an indicator of Chinese equity market performance.