Offshore Capitalist

DJCHINA: The Dow Jones China Broad Index & Chart

On May 28, 1996, in commemoration of the hundredth anniversary of the Dow Jones Industrial Average, Dow Jones & Company introduced its Dow Jones China Index series. As the first series of indexes developed by a global index provider for Mainland China’s stock markets, the Dow Jones China Indexes are designed to give investors worldwide a powerful tool for gauging the performance of China’s domestic equities markets.

The Dow-China Index series includes four indexes: the Dow Jones China Broad Market Index, the Dow Jones China 88 Index, the Dow Jones Shanghai Index, and the Dow Jones Shenzhen Index.

Float shares, which exclude state-owned shares, institutional shares and unlisted employee shares, are used for stock selection and index calculation, in order to provide an accurate representation of the shares that are actually available to investors for trading. In calculating free-float for selection of component stocks, the Dow-China Indexes exclude block holdings of individuals, other companies or governments that exceed 5% of total market value.

The Dow-Shanghai and Dow-Shenzhen index components are drawn from the universe of all stocks traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange, respectively. Each index is designed to cover 95% of the overall market capitalization. Components are selected based on float-adjusted market capitalization and liquidity. In order to achieve diversified representation across economic sectors and industry groups, sector allocation is also considered in the component selection process.

The Dow-China Broad Market Index, which represents 95% of shares traded on the Shanghai and Shenzhen exchanges, is constructed by combining the Dow-Shanghai and Dow-Shenzhen indexes. All three indexes are benchmarks designed to track the general trends in China’s growing equity markets. They provide Chinese investors with accurate and powerful tools with which to measure the movements of the broad market.

djchina_chart_20091028

Click for: Chart (Stockcharts)

via The DJChina Indexes.

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