SINGAPORE-LISTED China stocks are red-hot again, so a new index of 50 China counters here will be keenly watched by investors looking for an overview of this increasingly popular sector.

And individual China firms will be able to measure their own share price performance against the new index of their peers.

The index of 50 China stocks, called the FTSE ST China Index, will be launched in January, but a trial run will already begin on Monday.

The index will start with an initial value of 1,000 points, said Singapore Press Holdings, the Singapore Exchange (SGX) and the FTSE Group, which are joint owners of the new indexes.

The FTSE ST China Index is meant to represent the performance of Singapore-listed companies that are majority-owned by China interests. Ownership is the key criterion for companies in the index.

A component company must at least be 30 per cent owned by the mainland Chinese government, non-government-linked Chinese companies, or mainland China residents or nationals.

This approach will enable comparison by investors with a similar 'red chip' index for China companies listed on the Hong Kong Stock Exchange.

China Lifestyle Food and Beverages chief financial officer Sam Yap gave the index the thumbs up, as it will give more impetus to the trading of China stocks here.

'As China companies become an important part of the SGX listed family, a dedicated index will provide more attention and shine more lights on SGX-listed China companies as a whole, particularly given the average valuation of SGX-listed China companies that are lower than their Hong Kong- listed peers, not to mention their Shanghai- or Shenzhen-listed peers.'

Cosco Corp (Singapore) vice-chairman and president Ji Hai Sheng said: 'This is a positive move, as it will help more people understand China stocks, especially as there are around 130 China companies listed in Singapore now.'

He added that having an index with the involvement of The Straits Times will likely generate a following.

Currently, there is a China Index created by local boutique corporate finance firm PrimePartners.

It has 25 stocks that are selected based on market capitalisation, as well as for their representation of industry sectors.

The PrimePartners China Index has a market capitalisation of about $35 billion, covering 5 per cent of the total value of the Singapore share market.

The 50 stocks in the FTSE ST China Index have a total market capitalisation of $44 billion, or 6 per cent of total market capitalisation.

With both indexes, Cosco Corp (Singapore) is the largest stock with a market capitalisation of $11 billion.

PrimePartners' smallest company is China Petrotech, which is worth $121 million, while FTSE ST's smallest is Shanghai Asia, with a $127 million market value.

DBS Vickers' head of equity research Timothy Wong said: 'It's good to have a barometer, but it is a pity that some companies have been left out on the basis of ownership.'

He added that fund managers and investors are interested in companies' exposure to China and its growth story.

'If there are more sizeable companies that get listed in Singapore, I hope that they will be included in the index.'

SGX said other indexes may be launched down the road, which may be based on a company's exposure to China, rather than its China ownership links.

» New barometer