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The BITA China Internet Giants Index (BCINTG) is the definitive benchmark stock index for publicly listed Chinese internet companies. It is designed to track the performance of 30 of the biggest companies listed on the US stock exchanges that have a revenue exposure of at least 50% to the Chinese internet market. BCINTG was launched on the 16th of November 2018 by BITA, a reputable German-based FinTech company, which also maintains the index. China Internet Giants Index was given a base value of 1000 at inception. After a brief period of indirection, BCINTG found support and maintained an upward trajectory that went on to print an all-time high at the time of writing, above 2830 in February 2021. Tensions between US regulators on foreign companies early in 2021 inspired a pullback that saw the index settle just above 2000 as of March 2021.
Index Composition and Calculation
BCINTG is a market-capitalisation-weighted index calculated using the standard Laspeyres formula. There is a unique variable divisor applied to ensure that the index’s value maintains continuity across different underlying company changes, such as unforeseen corporate actions. The index is calculated in real-time with a 1-second resolution, and it is disseminated during US trading hours. There is a weight cap of 15% applied on any single constituent, with any excess weight distributed proportionally among all other constituents until that condition is achieved. For accuracy purposes, the China Internet Giants Index is calculated up to 13 decimal places, but it is rounded off to 2 decimal places for publishing, storage, and other dissemination purposes.
BCINTG has 30 constituents, filtered out by market capitalisation. To be included in the index, a company must meet the following conditions:
- Its stock must be listed and available for trading at a US-recognised exchange, having met all the strict conditions.
- It must have revenue exposure to the Chinese internet market of at least 50%.
- It must have achieved a minimum average daily traded volume of at least $500,000 over the last 90 days.
Here are the top 10 constituents of BCINTG as of March 2021:
|Alibaba Group Holding 1for8 ADR||15.14%|
|Jd.Com Class “A” 1for2 ADR||15.03%|
|Pinduoduo 1for4 ADR||14.73%|
|Baidu Class “A” 10for1 ADR||11.44%|
|Netease 1for25 ADR||9.35%|
|Tencent Msc.Entm. Gp 1for2 ADR||5.89%|
|Bilibili 1for1 ADR||5.20%|
|Vipshop Holdings 5for1 ADR||3.62%|
|Trip Com Group 8for1 ADR||2.86%|
|Iqiyi Ads Adr 1for7 ADR||2.57%|
Factors Influencing the Price of China Internet Giants Index
Internet companies around the world witnessed price surges during the COVID-19 pandemic period as populations were indoors due to government instituted lockdowns and curfew restrictions to try to curb the spread of the disease. China was the first country to report the virus, and Chinese internet companies quickly positioned themselves as enablers of the so-called ‘new world order.’ Interestingly, the biggest threat that emerged was regulatory risks. The Chinese government has reined in on Chinese internet companies, probing their management and antitrust activities, as well as imposing hefty fines in the process.
The regulatory headwinds have also emanated from abroad, particularly the US, where regulators have made stricter audit demands that have seen some Chinese internet companies face the threat of delisting from US exchanges. Beyond regulatory risks, the BCINTG can also be influenced by various other factors such as significant price changes in a major constituent(s), sector-specific taxation changes, interest rates, as well as investor sentiment towards the sector or overall equities market.
Why Trade BCINTG CFDs
China Internet Giants Index constitutes 30 of the biggest US-listed Chinese companies exposed to the growing Chinese internet market. These are the most liquid stocks, and their inclusion into BCINTG guarantees liquidity of the index practically at all times. Liquidity ensures that traders are assured of stable pricing and competitive spreads.
- Stable Price Action.
The composition and calculation of BCINTG ensure that the index will experience stable, predictable price action virtually at all times, except in unforeseen crises.
- Vast News Coverage.
The Chinese internet market is a lucrative area that is widely discussed in the media. China Internet Giants Index constituents are key players in major sectors of the market such as eCommerce, social media, and mobile gaming. As the benchmark index for Chinese internet companies, BCINTG experiences vast news coverage. This can help investors to stay up to date with major fundamental and technical highlights relevant to the index.
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