HotStocksNot Indices Reconstitutions 2008 0 comments

Since I formed my various sector indices in June 2006 I have not reviewed the component stocks, only removing certain ones when they were delisted. Since it's exactly two years to the month since then, I thought it's a good time to review the stock components and add new ones/remove old ones where appropriate. Below are the revisions, effective immediately.

Choosing of component stocks

To recap:
Component stocks are typically chosen on the basis of the following:
1. Market cap
2. Trading liquidity
3. Track record
4. Expectation of future performance (stability, growth, trading liquidity)
5. Intangibles (eg. institutional coverage, relevance to China sentiment, mindshare in investors' and traders' general attention span)

I also will usually not include stocks that were listed within the last 6 months because their post-listing track record is absent.

China Stock Index

Remove: (X9 stocks) Sinomem, Fung Choi, Asiapharm, HTL, China Dairy, Luzhou Biochem, C&O Pharm, CHT, DMX Tech

Add: (X9 stocks) Sino-Enviro, Synear, China Energy, Sunvic, Yangtzejiang, China Aviation, Sihuan Pharm, China XLX, Yanlord

Oil&Gas Stock Index

Remove: (X3 stocks) K1 Ventures, SSH, Sky China

Add: (X5 stocks) Swiber, Hiap Seng, CH Offshore, Mermaid Maritime, China Oilfield

Enviromental/Water Stock Index

Remove: (X2 stocks) Zhonghui, Dayen

Add: (X2 stocks) Epure, CNA, ecoWise

Plastics Stock Index

Will be discontinuing this one as it has already served its purpose of contrasting sector underperformance with the rest. Most of the stocks here are so illiquid that it is not worth tracking further until further notice.

Retail Stock Index

Remove: (X3 stocks) Metro, Popular, Pertama

Add: (X4 stocks) Thai Village, Challenger, The Hour Glass, Guthrie