Shanghai Stock Exchange Composite Index (SSE Composite – SHA: 000001)

The Shanghai Stock Exchange Composite Index (SSE Composite) is a stock market index that tracks the performance of all stocks listed on the Shanghai Stock Exchange (SSE). As a comprehensive benchmark, the SSE Composite provides investors with a broad overview of the Chinese stock market.

The SSE Composite is a market-capitalisation-weighted index. This weighting methodology ensures that the index reflects the most significant companies in the Chinese market. The SSE Composite was developed in 1990 and published in July 1991. It has a diverse range of sectors, encompassing industries such as finance, energy, raw materials, green power, IT, biotech, and consumer goods.

The SSE Composite serves as a barometer for the Chinese stock market, and is wider in scope than the SSE 50, offering investors valuable insights into the economic conditions and investment opportunities in the world’s second-largest economy.

SSE Composite Price & Chart 

Since its highs in 2021 following a bounceback from the Covid pandemic, the SSE Composite has struggled. More recently, there has been some bullish sentiment behind the index with the introduction of stimulus measures from China. This saw the SSE Composite gain more than 25% in a matter of weeks leading into early October. On the year, the index is up 10.7%, with markets looking to see more concrete measures in order for the bullish momentum to continue.

SSE Composite Price Forecast

The Shanghai Stock Exchange Composite Index presents a complex landscape of potential opportunities and risks. Whether you believe the Chinese economy will thrive or falter, it is important to consider both sides of the argument when investing.

The Bull Argument: China’s position as the world’s second-largest economy is a primary driver of the SSE Composite. The index’s close correlation with the Chinese economy positions it to benefit from favourable economic conditions. In a note to clients in June, analysts at JPMorgan said Chinese technology shares were benefiting from signs of an improving economy. “If the sector is able to grow their earnings at, let’s say, teens or even twenties, over the long run, I think people should reward those corporates for the earnings sustainability,” said Alex Yao, co-head of Asia TMT research at JPMorgan Chase & Co. The analyst also noted that if macroeconomic factors recover, then e-commerce names will benefit, adding that macro indicators “are showing early indication of a stabilisation.”

The Bear Argument: Ongoing geopolitical tensions, particularly between the United States and China, can create uncertainty and negatively impact investor sentiment towards the SSE Composite. Trade disputes, sanctions, tariffs, and diplomatic tensions can weigh on the index’s performance, as we have seen in the not-so-distant past. The Chinese government’s regulatory policies can be subject to change, potentially affecting the performance of listed companies and the overall stock market. For example, inJuly 2021, Beijing clamped down on the lucrative private tutoring industry, severely hitting stocks in the sector. Meanwhile, in March, a Goldman Sachs wealth-management executive warned against buying Chinese stocks, citing concerns about the country’s economy. 

Who Should Buy the SSE Composite

The Shanghai Stock Exchange Composite Index (SSE Composite) offers a unique investment profile that may appeal to various investor types. Here are some characteristics that align well with the SSE Composite:

Chinese Economic Exposure: Investorswanting exposure to the Chinese economy will find the SSE Composite a great option given that it provides a broad representation of Chinese companies across various sectors, allowing investors to participate in the country’s economic development.

Sectoral Diversification: The SSE Composite encompasses a diverse range of sectors. This diversification can help investors mitigate risks and capture growth opportunities in different industries.

Risk Tolerance: The SSE Composite is a volatile market, and investors should have a high tolerance for risk. Chinese markets can be subject to significant fluctuations due to factors such as geopolitical events, regulatory changes, and economic conditions.

Long-Term Perspective: Investing in the SSE Composite is generally recommended for investors with a long-term perspective. Short-term fluctuations can be significant, and it’s important to focus on the index’s potential for long-term growth and returns.

Trading The Index

SSE Composite Top 10 Companies

The index is adjusted and rebalanced monthly, with the adjustment effective as of the 6th trading day of each month.