A Study On The Necessity Of Eliminating The Shanghai Composite Index

With the increasingly strong comprehensive national strength, China’s GDP has overtaken Japan to become the world’s second largest economy. By the end of the third quarter of2012, China A-share listed company stock total market value of21.5trillion RMB, after the United States listed company common stock total market value of about105.2trillion RMB, the2nd largest in the world. The total amount from index to see, China ranked the forefront, but at the same time, China’s stock market all kinds of single index and developed countries compared to capital market and a big gap. A-share market is in order to adapt to the need of economic development of our country produces and develops, has the obvious supervision layer administrative regulation characteristics, today is not effective play economic the functions of the resources disposition, also cannot reflect the economic development the role of "barometer". Especially represents the a-share market’s flagship type bibcock index-Shanghai composite index, its long-term inherent preparation defect and playability has seriously hindered the healthy development of China’s stock market. This paper through the Shanghai composite index and Shanghai and Shenzhen300index at home and abroad, such as the main stock market index contrast, the Shanghai composite index of preparation and its characteristic and the stock index on Chinese stock market and futures market has brought harm and potential risk, the purpose is to find a more not easily by human control and more in line with the interests of the vast investors index, used to lead the healthy development of China’s stock market positive future.If you want to know anyone nation the development trend of the economic situation, we must first master on behalf of the country’s economic "barometer" stock price index the ups and downs of the situation. And a index can truly reflect the overall stock market operation state, requires the index has scientific objectivity. Be known as the dow Jones index, the British financial times index well reflects the United States and Britain of the whole stock market trends, to understand the above the country’s economic development provides a visual impression, at the same time, the healthy development of the stock market also cannot leave a representative index. Compared with the developed market, reflecting the Chinese stock market’s flagship type indicator is the Shanghai composite index, both in the government’s decision-making, media reports and people reference index to see, this stock index has been widely accepted by investors in China. However through the study found that the Shanghai composite index has controllable defective, has been a big money mechanism of profiteering tools, serious damage to the majority of the interests of investors, and in the stock index futures breaking today, also has hindered our country futures market health vigorous development.This paper points5chapters. The first chapter is the introduction, which introduces the research background, research significance and research framework, from our country stock market index and the world developed stock market index contrast, compiled from the market value of the weighted method, the component representative in Chinese stock market and the particularity of the unique aspects of eduction Shanghai composite index reflecting the harmfulness of the economic barometer and eliminate the index meaning.The second chapter is "the world’s major stock market stock price index comparative study", the Shanghai index and Shanghai and Shenzhen300index and developed capital market stock index differences, contrast analysis in our country due to limited sales strands of existence and most of the state-owned shares although lift the ban but in fact do not really full circulation of the special circumstances, the Shanghai composite index because of adopting the total market capitalization weighted method and has the leverage effect, make its have the risk of control by the agencies. The free circulation market capitalization weighted method ingredients stock index300index, do not have lever effect, the more scientific establishment method can be extensive objective reflection of the development of the global Chinese stock market.The third chapter is "the harmfulness of Shanghai composite index", in this chapter, first affirmed the contribution to the history of the index, on the A share market prophase development play A indelible role, but because our country capital market in the rapid development, the Shanghai index has up less than indicative function, its inherent defect instead of profiteering mechanism using, fish ordinary investors, cause in recent years our country stock market rises and falls. Although policymakers continue to post more scientific index to reflect specific stock market, but in the Shanghai composite index strong historical position and great assimilation, including Shanghai and Shenzhen300index, etc has become the index of "shadow index". At the same time, in Shanghai and Shenzhen300index as the mark of the stock index futures also do not rise to avoid risk hedging role.The fourth chapter is "the study of eliminating the Shanghai composite index’ to undertake a variety of harmfulness last chapter, the Shanghai composite index must be in China’s stock market exit historical stage, and enable more scientific global index such as Shanghai and Shenzhen300index become a new generation of leading index, and analyzed using the above decision no matter from the stock market or from the futures market has a positive historical significance.The fifth chapter is conclusion and policy suggestions. Conclusion two points:(1) has the leverage effect of Shanghai composite index can be control.(2) because of the existence of the Shanghai composite index, the Shanghai and Shenzhen300stock index and index futures was also the or so control. Policy Suggestions have two points:(1) management should take the interests of the vast investors view for strategic decision.(2) to eliminate the Shanghai composite index, the Shanghai and Shenzhen300index as the Chinese stock market new dominant index.The innovation of this paper lies in:(1) based on the current stock price index and major world advanced capital market share price index carries on the comparison, for the study of Chinese stock market healthy development mode provides a new perspective.(2) in this paper, through the point of view of the compiling method of the index, the Shanghai composite index and Shanghai and Shenzhen300index the ups and downs of the operation conditions, and the differences and relations between new views are put forward.(3) through the research, this paper puts forward our country should learn from the advanced market practice, should use ingredients stock index instead of comprehensive index, USES the free flow method to replace the value weighted method measures, so that the Chinese stock market to the healthy and sustained development, the protection of the interests of investors, make our country investors can share the results brought by China’s economic growth, and the viewpoint are discussed.