(1) Futures contracts based on the Shanghai and Shenzhen 300 Index can play a flagship role in China's stock index futures product series in the future and have the potential to occupy a dominant position in the market. Since the index was released on April 8, 2005, the market test shows that it has strong market representation and high investability. After the listing of Shanghai and Shenzhen 300 stock index futures products, CICC can gradually launch index futures products by market and industry according to market demand, forming a series of index futures products that meet the needs of customers at different levels.
(2) The Shanghai and Shenzhen 300 Index has a high market coverage and the weights of major constituent stocks are scattered, which can effectively prevent possible index manipulation in the market. According to statistics, as of June 18, 2007, the total market value coverage of the Shanghai and Shenzhen 300 Index was about 74.25%, and the market value coverage of circulation was about 62.85%. The cumulative weight of the former 10 constituent stocks is about 20.44%, and the cumulative weight of the top 20 constituent stocks is about 3 1.26%. The characteristics of high market coverage and scattered weights of constituent stocks determine that the index has good anti-manipulation ability.
(3) The constituent stocks of the Shanghai and Shenzhen 300 Index are evenly distributed in the industry and have strong resistance to the cyclical fluctuations of the industry. The index futures with this target have good hedging effect and can meet the risk management needs of customers. The components of the Shanghai and Shenzhen 300 Index cover energy, raw materials, industry, finance and other industries, and the market value coverage of companies in various industries is relatively balanced. This feature enables the index to resist the cyclical fluctuations of the industry and has a good hedging effect.