A new Shenzhen stock index is to be launched at the start of next year to help benchmark fund managers' performance and popularise index-based investment products. However, analysts say sibling rivalry between the two mainland stock exchanges is likely to frustrate joint efforts to develop an index tracking both Shanghai and Shenzhen-listed stocks. The new Shenzhen index comprises 100 stocks listed on the yuan-denominated A-share market. The constituents, updated every six months, are to be weighted by their free-floating market capitalisation and average trading turnover. The announcement follows the July launch of the Shanghai Stock Exchange 180 index. Unlike older indices tracking overall market movements, both the Shanghai 180 and Shenzhen 100 are specifically designed to help fund managers develop index-based products. The index's initial line-up includes Shenzhen Development Bank, real estate developer China Vanke and Guangdong Electric Power Development, said index-compiler Shenzhen Securities Information. The constituents represent about 40 per cent of the Shenzhen stock exchange's total free-floating market capitalisation and trading turnover and are trading at 28 times earnings, compared with Shenzhen-listed A shares' average price-earnings multiple of 38 times. Their earnings per share, at 18.7 fen (about 17.52 HK cents), is 65 per cent above the Shenzhen average. Although fund managers often used indices to benchmark their performance, only a handful of China's more than 60 equity funds were indexed products, said Citic Securities analyst Luo Ling. One hindrance is the absence of a unified stock index widely recognised by the investment community. Prior to the Shanghai 180's launch on July 1, there had been talk of plans for a China 300 index, tracking 180 Shanghai-listed and 120 Shenzhen-listed stocks. The plan appears to have been shelved because of 'poor co-ordination', according to a source close to the Shanghai stock exchange. Meanwhile, no new listings have been approved for the Shenzhen exchange for more than two years, ahead of a planned merger of the two main boards and relocation to Shanghai. Shenzhen, which would get a Nasdaq-style second board in return, saw itself as losing out in the process, analysts said. Citic Securities, China Galaxy Securities and Xinhua FTSE Index have compiled unified China stock indices. With the exchanges' monopoly over the most cost-effective channel of market information distribution, other index compilers were fighting an uphill battle to market their existing unified index products, analysts said.