Index, data and analytics provider FTSE Russell will include eligible China A-shares listed from the Shanghai Stock Exchange’s Sci-Tech Innovation Board (STAR Market) in its FTSE China A Share indexes and FTSE Global Equity Index Series (GEIS).
The changes will be effective as of March 22 2021. As a result, 50 STAR stocks will enter the FTSE Global All Cap China A Inclusion index, with several other China A-share indexes also seeing constituent additions.
The FTSE Russell will add the STAR Market to its list of eligible exchanges and market segments in conjunction with its semi-annual equity index review, following the admittance of STAR stocks for trading via the Northbound China Stock Connect programme from February 1 2021. The decision also follows strong client support expressed in a 2020 market consultation.
STAR Market companies that are part of the FTSE China A All Cap Index and are also eligible under the Northbound China Stock Connect will be considered for inclusion in the FTSE GEIS and derived indexes, including the FTSE Emerging index. A total of 11 STAR stocks meet the criteria for entry into FTSE GEIS at the March 2021 index review.
STAR Market additions will be based on the current phase one inclusion factor of 25%. FTSE Russell promoted China A-shares to secondary emerging market status in 2018, with phase one completed in June 2020.
“Today’s inclusion to our global equity benchmarks is a key development of China’s capital markets, enriching the investment opportunity set for foreign investors,” says Jessie Pak, managing director, FTSE Russell, and head of investment solutions, Asia-Pacific, LSEG.