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China Fund News Taylor

Brothers and sisters, let’s take a quick look at some news tonight.

A-shares have big news on Monday!

Previously, the Shanghai Stock Exchange and China Securities Index Co., Ltd. issued the "Announcement on the Release of Real-time Quotes of the Shanghai Composite Total Return Index". The announcement shows that in order to facilitate investors to observe the overall returns of the Shanghai securities market, the Shanghai Stock Exchange and China Securities Index Co., Ltd. decided to officially release the real-time quotes of the Shanghai Composite Total Return Index from July 29, 2024, and at the same time adjust the index code and abbreviation to "000888" and "Shanghai Stock Return" respectively.

According to the SSE Composite Total Return Index Compilation Plan,The Shanghai Composite Total Return Index is a derivative index of the Shanghai Composite Index.The index is composed of eligible stocks and depositary receipts listed on the Shanghai Stock Exchange, and the sample dividends are included in the index income, reflecting the overall performance of listed companies on the Shanghai Stock Exchange after the dividend income is included. The index takes July 21, 2020 as the base date and 3320.89 points as the base point.

The analysis pointed out that the total return index has a different compilation method and includes dividends in the index calculation. The total return index is an index that takes into account stock price changes and dividend reinvestment, and it more comprehensively reflects the real return of stock investment.The main difference between the total return index and the price index is that the total return index includes the income from dividend reinvestment, while the price index only reflects the changes in stock prices. Therefore, there are differences in the compilation plans of the Shanghai Stock Exchange Return Index and the Shanghai Stock Exchange Index.

Specifically, the SSE earnings include company events such as cash dividends in its assessment indicators, while the SSE index only focuses on the company's market value. For example, if the stock price is 100 yuan and a dividend of 10 yuan is paid, the ex-rights stock price is 90 yuan, and the SSE index is calculated using this price; the SSE earnings are calculated using the price of 100 yuan including dividends. Therefore, due to the differences in basis points, base dates and compilation methods, it is reasonable that the SSE earnings point is slightly higher than the SSE index point.

As of last Friday (July 26), its closing point was 3199.76, with a weekly decline of 2.94%, slightly better than the performance of the Shanghai Composite Index last week (-3.07%). This also means that on Monday morning, the opening point of the index should be around 3200 points.

Big news from Evergrande Auto

On the evening of July 28, Evergrande Auto issued an announcement on the Hong Kong Stock Exchange stating that the company’sSubsidiaries Evergrande New Energy Automobile and Evergrande Smart Automobile (hereinafter referred to as the relevant subsidiaries)The Company received a notice from the relevant local people's court on July 26. On July 25, individual creditors of the relevant subsidiaries applied to the relevant local people's court for bankruptcy reorganization of the relevant subsidiaries.

Evergrande Auto said that the above notice had a significant impact on the production and operation activities of the company and its related subsidiaries. As of the close of July 26, Evergrande Auto's share price was HK$0.335 per share, a closing increase of 3.08%.