CITIC Securities, China's first and largest publicly traded brokerage, said it is to establish a joint venture with Standard & Poor (S&P), one of the world's major providers of credit ratings, to develop and sell indexes.

Setup of the joint venture did not need the approval from the China Securities Regulatory Commission (CSRC), because CSRC had no department to supervise the stock index research market, China Daily reported Friday.

The joint venture, to be financed with 500,000 US dollars from both parties, is to develop and sell indexes that track stocks and fixed-income securities and charge clients for developing derivative products based on the indexes, the newspaper quoted Xu Gang, the research department manager of CITIC Securities, as saying.

The main indexes for the joint venture to develop would be the S&P/CITIC 300 and the S&P/CITIC 50.

The S&P/CITIC 300 would be the benchmark index, reflecting the performance of the whole Chinese A-share markets and a successor of the CITIC Index. It will cover over 60 percent of the total A-share market capitalization and about 55 percent of the liquidity of the entire market in terms of the total value traded.

The S&P/CITIC 50 will cover the 50 largest and most liquid stocks, with sound financial fundamentals drawn from the S&P/CITIC300.

As an arm of China's biggest state-run investment company, CITIC Securities has been a brokerage heavyweight. It launched its own index in 2000, which gradually gained wide acceptance among investors. Nearly 30 funds adopted CITIC indices as performance benchmarks.

CITIC Securities' business has still been expanding its business this year. On Wednesday, CITIC Securities announced it would acquire Zhejiang-based Gold Stone Securities for 796 million yuan (98.3 million US dollars). This is the broker's second acquisition after it swallowed up the debt-ridden China Securities along with China Jianyin last month.

Two months ago it got the regulator's approval to expand its business outside the mainland by setting up a unit in Hong Kong.

CITIC Securities is working to become China's No.1 brokerage, a high company official was reported as saying recently.

Source: Xinhua