Many investors called to ask why the weight of PetroChina Company Limited (PetroChina) was only about 2% in the CSI 300 Index while its weight in the SSE Composite Index exceeded over 20% with the total capital stock of 161.922 billion and total market capitalization over RMB6 trillion, ranking first among all A shares.
The CSI 300 Index calculates the weight based on the free-floating capital stock after the classification, which is different from the SSE Composite Index. Though the total market capitalization of PetroChina stays ahead in the Shanghai Stock Exchange and the Shenzhen Stock Exchange, it has a relatively small free-floating capital stock. For example, on November 19, 2007, the amount of PetroChina’s total issued A shares was 161.922 billion shares, with the amount of floating A shares of 3 billion shares. According to the closing price of RMB38.07 on the very day, PetroChina’s market capitalization calculated into the SSE Composite Index was RMB6.16 trillion (161.922 billion×RMB38.07). However, its weighted market capitalization calculated into the CSI 300 Index was RMB114.21 billion (3 billion×RMB38.07) and its weight was 1.86% in the CSI 300 Index, ranking No. 7. The accumulative weight of the top 10 companies in the CSI 300 Index was 30.49%, while that of the top 20 companies was 43.27%. The decentralized weight marks that the CSI 300 Index is more resistant to manipulation.
Source: China Securities Index Co., Ltd.
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