Dow Jones Indexes Monday launched the Dow Jones CBN China 600 Index, a broad Chinese benchmark index, in co-operation with China Business Network Co Ltd (CBN).

The index, the first-ever authoritative media index for the Chinese stock markets, covers companies listed at the Shanghai and Shenzhen stock exchanges, reported China Daily.

They are selected according to float-adjusted market capitalization which had reached 888.5 billion yuan (US$107.35 billion) as of August 31, 2004 - approximately 70 per cent of China's total market capitalization.

"The co-operation with CBN aims to create a broad Chinese market index and to establish it as the leading investable market index in China," said Karen House, senior vice-president of Dow Jones & Company.

Dow Jones Indexes calculates and maintains more than 4,000 indexes, some of which incorporate a variety of investment products that, in aggregate, have US$600 billion in investment capital tied to them.

"The CBN China 600 index, covering about half of all equity securities in the country, is able to reflect truly investable opportunities in China's stock markets, which is capturing the interest and attention of investors all over the world," House said.

"It is our joint goal, at Dow Jones and at CBN, to build this new index into the world's most widely followed stock market indicator for China."

Insiders said the creation of the new index is a reflection of the growing importance of the Chinese economy and the increasingly important role of the nation's stock exchanges.

"This new media index is a valuable experiment to help foster the development of China's capital market," said Ye Zhikang, president of Shanghai Media Entertainment Group.

House said Dow Jones has recognized that the Chinese economy is becoming one of the world's most vibrant.

With indexes focused on China, Dow Jones hopes to bring a higher level of understanding of movements and developments in the Chinese market.

"The new indexes will make the Chinese stock markets more efficient, giving investors in China and from abroad greater confidence about investing in Chinese companies," she said.

The CBN China 600 Index will provide a rules-based index methodology consistent with the Dow Jones global index family, which has proven popular with market participants using the Dow Jones STOXX 600 index, said Lars Hamich, managing director of STOXX Ltd.

The CBN China 600 index will be distributed on a daily basis through the Wall Street Journal, the Asian Wall Street Journal, CBN's TV media and CBN Daily newspaper, he said.

Source: China Daily