Have you ever read the abbreviation SSE in some forex site? Do you know what the SSE Composite Index really is and why many investors use it? More importantly, do you know what SSE means? Let’s finally see you everything you need to know about this index.
What is SSE?
SSE stands for the Shanghai Stock Exchange. To clarify, the SSE is a stock exchange located in the city of Shanghai, China. And currently, this stock exchange operates independently in the People’s Republic of China. Moreover, the only other stock exchange that operates independently is the Shenzhen Stock Exchange.
Further, with an astonishing market capitalization of US$5.5 trillion, the Shanghai Stock Exchange (SSE) is ranked 4th in the world. However, due to the tight capital account controls and the decisions of the central government, the world’s 4th largest stock market is not entirely open to foreign investors. Moreover, the SSE is a non-profit organization. As such, it is directly administered by the China Securities Regulatory Commission (CSRC).
- Market cap: CN¥32.697 trillion September 2017
- Foundation: 15 July 1991
- Base Date: 19 December 1990
- Base Point: 100
Structure of the Shanghai Stock Exchange
Investors can trade on the Shanghai Stock Exchange every Monday to Friday. Moreover, the SSE is closed on Saturday and Sunday. However, the market might be closed on holidays, which is announced by the SSE.
Also, there are three main categories of securities – stocks, bonds, and funds.
Listed Companies – 1,524
Listed Securities – 14,115
Listed Stocks – 1,567
Market Cap: 32,909￥billion
Turnover: 144 ￥billion
Listed Funds – 279
Market Cap: 565￥billion
Turnover: 24 ￥billion
Listed Bonds – 9,092
Market Cap: 36,934￥billion
Daily Volume – 2,061,212
Monthly Volume – 50,524,969
Open Interest – 3,241,128
What is SSE Composite Index?
So, the SSE Composite Index is a stock market index. And most importantly, it is an index of all stocks that are traded at the Shanghai Stock Exchange. Actually, the primary goal of the SSE Composite index is to reflect the overall performance of the Shanghai Stock Market.
Moreover, the main constituents of the SSE Composite Index are A & B shares. However, A-shares are restricted to domestic investors only and are priced in the local Renminbi yuan currency. On the other hand, B-shares are calculated and priced in U.S. dollars for calculation purposes. Moreover, the B share stocks are for both domestic and foreign investors.
It must be noted that since 2003, foreign investors are allowed to trade in A-shares. They can do so under the Qualified Foreign Institutional Investor (QFII). Nowadays, there are only 98 foreign investors that have been approved.
Moreover, the SSE Composite Index is weighted by total market capitalization. Below you will see how the index is weighted. Furthermore, related indices are the following:
- SSE Mega-Cap
- SSE MidCap
- SSE 50
- SSE 180
- SSE 380
Essential Information, Performance, and Statistics Details
- Index Name: SSE Composite Index
- Shortened Name: SSE Index
- Constituents: 1412
- RIC Ticker: .SSEC
- Currency: CNY
- BBG Ticker: SHCOMP
- Open: 2,927.92
- Prev Close: 2,932.17
- 5 Day: -2.41%
- 1 Month: – 0.65%
- 3 Month: -4.59%
- 1 Year: 2.97%
- 1 Year Return: 5.51%
- YTD Return: 16.49%
- Day Range: 2,905.19 – 2,936.48
- 52 Week Range: 2,440.913,288.45
- P/E Ratio: 14.10
- Bloomberg (BEst) P/E Ratio: 11.4478
- Price to Book Ratio: 1.4624
- Price to Sales Ratio: 1.0503
- EPS: 206.08
- Last Dividend Reported: 0.032861
All Shanghai Stock Exchange Indices are calculated using the Paasche weighted composite price index formula. In other words, for the calculation, you will need a base period on a specific base day. Also, the index is based on this period.
For instance, the base day is December 19, 1990. Moreover, the index was launched on July 15, 1991. The base value is 100. Also, the base period is equal to the total market capitalization of all stocks that day. So, the formula is the following:
Index Calculation Formula:
Current index = Current total market cap of constituents × Base Value / Base Period
Total market capitalization = ∑ (price × shares issued)
Constituent’s Periodical Review
Investors need to know that the index is adjusted and rebalanced monthly. Furthermore, each adjustment takes effect on the 6th trading day of each month.
SSE Composite Index | SHA: 000001
At the time of writing this article, the SSE Composite Index is 2,905.19 (−26.98) (0.92%). Also, to save you the trouble, we have listed the top 5 constituents in the financial sector as well as the top 3 performers.
Top 5 Constituents in the Financial Sector by Weight
601398 Industrial and Commercial Bank of China Ltd
Free Float Adjusted 129.4
Market Cap Weight 4.61%
601288 Agricultural Bank of China Co Ltd
Free Float Adjusted 146.0
Market Cap Weight 3.42%
601318 Ping An Insurance (Group) Company of China Ltd
Free Float Adjusted 86.8
Market Cap Weight 2.92%
601988 Bank of China Ltd
Free Float Adjusted 586.7
Market Cap Weight 2.34%
601628 China Life Insurance Company Limited
Free Float Adjusted 46.2
Market Cap Weight 1.77%
Top 3 Performers
Hy Energy Group Co. Ltd. A
CHG % 10.07%
Qibu Corp. Ltd. A
CHG % 10.04%
Fujian Raynen Technology Co. Ltd.
CHG % 10.03%