Cercius Group's premise is simple. Politics is the driving factor behind all socio-economic matters in the People's Republic. And given the recent economic slowdown in China, the Party can no longer afford to bail out every company in the event of a default. The Party must pick and choose which companies are "worthy" of being bailed out. This will be determined to a very large extent by the companies' relationship to the Party's leadership.
The Cercius China Composite Index assesses a total of 12 data points. Each data point carries a specific weight. Some of the data points we measure include the relationship of a company's senior management with the Party; the industry and size of a company; and the reputation of the company.
How It Works
We reiterate here that the Index measures the likelihood of a state bailout in the event of a bond default. The index DOES NOT measure the likelihood of a default and cannot be substituted for a credit rating.
For the time being, the Cercius China Composite Index encompasses the Shanghai- and Shenzhen-listed companies that comprise the China CSI 300 Index. Each of these companies is assigned a value of between 0 and 5. The closer a company is to 0, the less likely it is to receive a bailout; and vice versa.
Naturally, our values for these 300 companies are not static. We update these values when needed or when new documentation becomes available. For example, when there is a senior management change at a company or when the domestic political landscape changes.
While our Index only covers companies listed in the China CSI 300 Index, our methodology can be applied to any publicly listed and non-publicly traded company in mainland China. This will not be covered in our standard product.
We offer three tiers of subscription options for the Cercius China Composite Index:
· Tier 1 only gives the subscriber the values for all companies in the China CSI 300 Index.
· Tier 2 provides the subscriber with the values for all companies in the China CSI 300 Index and the subscriber can request a detailed breakdown and analysis for the companies' values.
· Tier 3 provides the subscriber with the values for all companies in the China CSI 300 Index and the subscriber can request a detailed breakdown and analysis for the companies' values. Additionally, the subscriber can ask us to analyze any Chinese company outside of the China CSI 300 Index (up to a maximum of 10 per month) located in the People’s Republic.
Pricing and Samples
Please contact us directly for pricing options.
To request a sample of the Cercius China Composite Index or if you have any questions on this product, please contact us through our website or any of our social media platforms.