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BIZCHINA / Center
CSI to launch governance index
By Jin Jing (China Daily)
Updated: 2007-09-24 08:55
China Securities Index Co Ltd (CSI), the securities indices provider,
said yesterday that it is preparing to launch a new index on the
governance of China-listed companies.
The new index, which is expected to be launched at the Shanghai Stock
Exchange on January 1, 2008, will list companies according to their
corporate governance.
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This is the first time for China to introduce a criterion to evaluate
corporate governance.
The new index aims to strengthen corporate governance, and will provide
mutual fund companies with an underlying index for new products,
according to the CSI.
The qualified companies need to have been listed on the Shanghai bourse
for 12 months, or listed in other bourses for 12 months and also listed
in Shanghai.
The companies must not have violated any regulations in the past three
years, had their stock listed as "Special Treatment (ST)", "*ST", or
called a listing halt, according to a draft notice from the CSI.
After the application process, the selected companies will be appraised
both by the public and industry experts.
Public assessment is expected to begin at the end of next month.
Investors can see the companies' information online and vote on it.
Meanwhile, CSI will organize a team consisting of security companies,
fund management companies, insurance companies and other assessment
institutions to appraise the corporate governance of the selected firms.
At the final stage, CSI will set up a consultative committee of experts
to review the methods, process and results of the appraisal, select
companies and compile the index before December this year.
CSI said it would revaluate and adjust the constituent stocks in the
sector every year.
"Introduction of the index will help the government to better supervise
listed companies' management and protect investors' interests," said
Zhang Zongxin, a professor at Fudan University.
"Besides, it is expected to be welcomed by institutional investors,
including fund and security companies, which favor well-managed companies
as an investment target," he added.
"Diversified indices can meet the requirements of specific investors, and
the corporate governance index will help investors invest more
rationally," said Zhu Haibin, an analyst at Essence Securities.
(For more biz stories, please visit Industry Updates)
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