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FXI Launches New Index for China

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More news out of Asia. Yesterday we told you about the Hong Kong exchange announcement to cross-trade exchange-traded funds (ETFs) on May 2, just two days before the Singapore exchange will cross-list ETFs with the American Stock Exchange (AMEX). Additionally, Barclays Global Investors indicated that it plans to launch a country-specific iShare based on an MSCI broad market index for China.

FTSE/Xinhua Index Ltd (FXI) announced the launch of the FTSE/Xinhua China 25 Index yesterday. FXI is a joint venture company set up in December 2000 by Chinese news agency Xinhua and UK-based index provider FTSE . Last year, Xinhua launched China's version of the Dow Jones Industrial Average - the Xinhua Composite Index, which is comprised of 400 Chinese companies.

The new FTSE/Xinhua China 25 Index is made up of the largest, most liquid Chinese companies. FXI said that, pending regulatory approval, an ETF based on the new index will soon be listed on the New York Stock Exchange (NYSE). That announcement further highlights the desire by NYSE to catch up with AMEX in terms of international ETF launches and global trading platform development. ETFs are a core business for AMEX, and NYSE has found itself left behind in the dust.

FXI said financial indexes that adopt global standards are of importance as China prepares to enter the World Trade Organization (WTO).

"Further Chinese indices for domestic and overseas investors will be announced in the coming months," said Mark Makepeace, FXI director and CEO of FTSE.

Expect even more headlines from Asia as index providers and fund managers rush in to to carve out market share in undeveloped regions with a high potential for growth.