PrimePartners China Index tracks performance of SGX-listed China stocks

SINGAPORE : A new benchmark has been launched to allow investors to track China stocks listed in Singapore.

PrimePartners China Index covers 25 Chinese-owned and managed companies, with a total market capitalisation of over S$13.8 billion.

The PrimePartners China Index is the brainchild of financial services firm PrimePartners Corporate Finance.

It says the new index will help investors better monitor the performance of a diversified portfolio of SGX-listed China stocks, which are fast becoming the alternate investment option to Singapore blue chips.

"In the last four years we've seen 105 companies come on. They now represent 15% or one in seven shares traded. We think it's time to have something that focuses on this niche of the market," says Quek Peck Lim, chairman of PrimePartners Corporate Finance.

The index comprises 25 component stocks including Cosco Corp, Bio-Treat and Fibrechem.

It is value-weighted and covers most sectors in manufacturing and services.

The index will be available to brokers and subscribers of the SGX price feed beginning October 2.

It uses the same methodology as the Straits Times Index, UOB SESDAQ Index as well as the S&P 500.

PrimePartners China Index will initially be calculated on a close to real time basis, with a 10 minute delay on the SGX price feed.

The index is disseminated through Reuters and will also be available on Bloomberg.

The PrimePartners China Index is designed to be a benchmark for issue managers and fund managers to track the growth of fast growing Chinese companies.

And with a stock index, there will be opportunities for stocks to feature in warrants, exchange-traded funds and futures contracts.

PrimePartners considered several factors when picking the companies that would form the index.

"They would have to have a large market capitalisation, that's one filter. They would have to be among the top in terms of trading volume, and they would need to have sufficient free float and represent a spread of industries," says Quek Peck Lim, chairman of PrimePartners Corporate Finance.

There is one glaring exclusion from the index - China Aviation Oil.

"China Aviation Oil had some problems which it had to resolve. There was a period when it was suspended. Although it is a huge market cap stock, and would ordinarily be considered, we felt we should not put it in at this moment because of its sporadic trading record over the last 12 to 15 months," says Quek.

PrimePartners says the counter could be included at a later date pending review.