NEW YORK, April 25, 2007– Dow Jones Indexes, a leading global index provider, today launched the Dow Jones Hong Kong IPO Index which measures the performance of the Hong Kong IPO market.
The Dow Jones Hong Kong IPO Index includes all companies which have their initial public offering on the Hong Kong Stock Exchange, including Chinese H shares, with a free-float market capitalization of more than 200 million Hong Kong dollars at the start of trading on their respective listing dates. A company does not have to be headquartered, domiciled, or have operations in Hong Kong to qualify for the Dow Jones Hong Kong IPO Index. If a company goes public simultaneously in multiple markets, the Hong Kong Stock Exchange must be its primary listing; Chinese H shares are always eligible regardless of the other markets the company’s shares trade on.
The Dow Jones Hong Kong IPO Index is designed to underlie investment products, such as exchange-traded funds, mutual funds and other investment vehicles.
“Increasingly, Initial Public Offerings are considered a separate asset class that is garnering growing investor attention,” said Michael A. Petronella, president of Dow Jones Indexes/Reprints. “The launch of the Dow Jones Hong Kong IPO Index marks another major innovative step in our effort to provide investors with measurements tools for highly dynamic equity segments and emerging market segments.”
New components have to trade for five days after their first listing dates before they are added to the Dow Jones Hong Kong IPO Index. They are then included on the first Friday following their first five days of trading. Index components are removed after the close of trading on the first Friday following the 12 calendar months after their inclusion in the index. In addition, each component’s weight in the index is capped at 15% of the index’s total free-float market capitalization.
The number of components of the Dow Jones Hong Kong IPO index is variable, but always maintains a minimum of 10 components to ensure the stability of the index. If a pending removal of a year-old component would drop the number of components in the index below 10, the component’s exit date will be extended until a new IPO can be added.
As of March 30, 2007, the Dow Jones Hong Kong IPO Index (USD version) had an annualized total return performance over the last three years of 41.69%.
The Dow Jones Hong Kong IPO Index is calculated in both the Price and Total Return versions in Hong Kong dollars as well as U.S. dollars and is disseminated End-of-day. Daily trading history is available back to December 31, 2000 at the base value of 1000.
The Dow Jones Hong Kong IPO Index is reviewed weekly for additions and deletions. Number of shares, free float and weighting capitalization factors are reviewed quarterly in March, June, September and December. Companies in the Dow Jones Hong Kong IPO Index are also reviewed quarterly for liquidity according to the Dow Jones Global Wilshire rules.
Further information about the index is available at www.djindexes.com/mdsidx/?event=showHongKongIPO.
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