SSE (Shanghai stock exchange) and CSI (China Security Index co.) decided to revise the compilation plan for the Shanghai Composite Index from July 22, 2020. The Shanghai Composite Index was first released in 1991, with a base date of December 19, 1990. Judging from the performance in the past 10 years, the SSE Composite Index has risen by only 18.08%, far behind CSI 300 Index, 52.02% and 56.39% of the Shanghai 50 Index, and 131.88% of the GEM Index. It is slightly higher than 17.07% of the Shenzhen Component Index.
The Shanghai Stock Index is often debated by investors due to the performance of the index does not reflect the growth rate of domestic GDP. For example, from 2000 to 2020, China’s GDP has increased by more than 10 times, while the SSE Composite Index rose by only 50%.
source from google finance
There are three important points in the revised plan:
1. Delay the time for new stocks to be included in the Shanghai Composite Index until one year after listing, and new stocks with large market value can be included in 3 months after review;
2. ST shares will be removed from the index components;
3. The shares of the Science and Technology Board will be included in the Shanghai Composite Index in accordance with the revised rules.
The index uses December 31, 2019 as the base day and 1000 points as the base point. The data of the index will be officially released on July 23 in real time along with historical data.