Nasdaq To Start China Index

The Nasdaq Stock Market will begin tracking the performance of Chinese companies that are listed on U.S. exchanges with the Nasdaq China Index. The Index will be listed under the symbol CHNX. The exchange plans to have the Index operational before the end of the second quarter.

The Index will include 30 of the largest Chinese companies, weighted using a “modified” market capitalization system. To be considered, a company must have a market capitalization of more than $200 million, trade more than 100,000 shares on average, and be priced at $3 or higher. Companies that are headquartered in Hong Kong will also be considered for inclusion.

There are 38 Chinese stocks currently listed on Nasdaq, representing around $30 billion in market capitalization, but the Index will include issues that are listed on any U.S. exchange. Officials did not release a list of proposed companies, but they did mention China Mobile (CHL), with a market cap of $182 billion and Baidu (BIDU), which is worth $3.1 billion.

Because China will soon become the world’s fourth largest economy, Nasdaq is eagerly soliciting business from there.

Nasdaq also profits when one of its indexes is used as the basis of an exchange traded fund.

Disclosure: none.