On September 3rd, FTSE Russell announced review changes to the FTSE China 50 Index, FTSE China A50 Index, FTSE China A150 Index, FTSE China A200 Index, and FTSE China A400 Index. Among them, the most market-watched FTSE China A50 Index will include BeiGene-U, Innolight, WuXi AppTec, and GIGALIGHT, while removing China National Nuclear Power, China Unicom, NARI Technology, and Wanhua Chemical.

Image source: FTSE Russell

The changes will take effect after the close on Friday, September 19th (i.e., Monday, September 22nd).

This FTSE China A50 Index adjustment includes BeiGene-U, Innolight, WuXi AppTec, and GIGALIGHT; while removing China National Nuclear Power, China Unicom, NARI Technology, and Wanhua Chemical. Among them, Innolight and GIGALIGHT are both optical module companies, while BeiGene-U and WuXi AppTec are both innovative pharmaceutical companies. The optical module and innovative drug sectors have been among the leading sectors in terms of stock price gains this year.

Innolight and GIGALIGHT are the recently popular "dual heroes" of the AI optical module concept. As of the close on September 3rd, GIGALIGHT closed at 426.19 yuan per share, up 10.99%, with a total market value exceeding East Money, ranking second on the ChiNext board. As of the close on September 3rd, GIGALIGHT has accumulated gains of 246.45% year-to-date, while Innolight has accumulated gains of 349.66%.

The inclusion of related stocks in the FTSE China A50 Index is expected to attract more passive capital inflows.

Additionally, the FTSE China A50 Index reserve list includes: China Minsheng Banking, China Molybdenum, Flush, SAIC Motor, and Seres. Starting immediately until the next quarterly review, if one or more constituent stocks are removed, this reserve list will be activated.

The FTSE China A50 Index is compiled and published by FTSE Russell, consisting of the 50 largest stocks by total market capitalization from the Shanghai Stock Exchange and Shenzhen Stock Exchange markets, reflecting the performance of the most influential top 50 listed company stocks in the A-share market. This index is often viewed by offshore investors as an important benchmark for measuring Chinese stock performance.

Generally speaking, the logic behind regular index adjustments mainly involves multiple dimensions such as market value changes, liquidity, and financial health, so constituent stock adjustments are highly correlated with companies' periodic stock price performance. The companies included this time are also quite consistent with recent market themes.