China to launch new index with Hong Kong, Taiwan firms

With the signature of three memoranda of understanding between China and Taiwan in November, “the cooperation in financial sectors across the straits is now entering a substantial phase,” it said.

The documents — on banking, insurance and securities — are expected to help pave the way for Taiwan's finance industry to gain greater access to the huge mainland market and open up the possibility of more investment activity.

The new index “caters to investors' need to observe and invest in markets in the three places and provides a basic instrument for developing index-related products and derivatives,” according to the statement. A number of domestic and overseas institutions are making “proactive” preparations to develop investment products based on the new index for the Greater China region, it added, without giving more details.

The company will publish the index denominated in Chinese yuan, U.S. dollars, Hong Kong dollars and Taiwan dollars, and the components will have a combined market value of around 3.2 trillion yuan (US$468.5 billion).

It covers 75 percent of the total market capitalization of the stock markets in mainland China, Hong Kong and Taiwan, and 53 percent of the combined trading volume.

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