BEIJING, Jan. 12 -- A new index designed to measure and monitor the performance of high growth Chinese small and medium-sized enterprises (SMEs) trading in stock exchanges outside the mainland has been launched.
New York Pacific Capital (NYPC), a global merchant bank, announced the launch of NYPC China SME Growth Index consisting of 58 companies selected from 319 overseas Chinese firms, covering nine sectors: consumer discretionary, industrials, IT, consumer staples, health care, energy, financials, utilities and telecommunication services.
The US dollar denominated index is weighted by the component firms' market capitalization, with a range from $50 million to $1.5 billion for initial portfolio construction and eligibility.
The small caps range up to $1 billion and account for 77 percent while the mid caps of $1 billion to $1.5 billion account for 23 percent.
The component companies have the revenue growth rates of at least double China's GDP growth rate with positive net margin, high liquidity, and at least 30 percent public float of outstanding shares.
"We're excited to provide a new tool to track the performance of Chinese companies available to international investors, which are domestic consumption driven with more than 50 percent revenue generated from the mainland," said David Kopp, CEO of NYPC.
"The appeal of NYPC China SME Growth Index lies in the sound business fundamentals and superior growth of the constituents, which are particularly attractive to investors in the broader China overseas equity markets," Kopp said.
Zheng Tao, vice chairman of the Index Committee echoed Kopp's ideas and added: "Compared with other China-focused indices, the NYPC China SME Growth Index most effectively captures the overseas market expectations of major growth industries in the mainland."
"When backtracked to January 1, 2009, the index was up 134.5 percent compared with 52.02 percent for Hang Seng Index, 58.9 percent for MSCI China, 79.98 percent for Shanghai and 111.24 percent for Shenzhen Stock Exchange Composites Indices," Zheng said.
The Index was created, calculated, and will be maintained by NYPC, whose index committee serves as the index administrator for review and compliance of index-eligible companies. And it will be rebalanced by the index committee semi-annually in January and July.