Revamped Straits Times Index seeks to boost trading

The index was reduced from 47 stocks to 30 blue-chips ranked by market capitalization as of Aug. 31, 2007.

It is complemented by a new family of FTSE ST indices that consist of five benchmark and 13 industry indices, including a new themed index to represent China stocks listed in the city-state, said a joint statement from the Singapore Exchange (SGX), London’s FTSE Group and Singapore Press Holdings (SPH).

The “launch is a major milestone for the Singapore market as we now adopt a globally recognized methodology for our indices,” said Hsieh Fu Hua, SGX chief executive officer.

“We expect that the revamped STI and new indices will stimulate the development of more index-related products, spurring greater trading.

The new indices allow investors to measure and invest in the major capital segments of the Singapore market for the first time and facilitate cross-border analysis and comparisons.

“FTSE is pleased to partner with SGX and SPH to apply FTSE’s internationally recognized methodology to Singapore’s domestic benchmarks,” said Mark Makepeace, FTSE Group chief executive.

“The revamp of the STI and the launch of the new STSE ST Index Series shows their commitments to creating a vibrant market for Singapore by encouraging the creation of index-linked products with an underlying index that is investible, tradable and transparently managed,” he said.

Among the new firms added to the STI were two Chinese firms, Yanlord Land Group Ltd., a real estate developer, and Yangzijiang Shipbuilding (Holdings) Ltd., China’s second-largest private shipbuilder.

Singapore-based Wilmer International Ltd, the world’s biggest palm oil trader, and SIA Engineering were also included.

Among those dropped was Chartered Semiconductor Manufacturing Ltd., Singapore’s biggest chipmaker.

The revamped index is not likely to be more volatile, analysts said.

Volatility is largely determined by market sentiment, noted Terence Wong, researcher at DMG & Partners. “I don’t think there will be a significant difference.”

Subscribe to The China Post and save 25%. Click here

SharePrintEmail

Write a Comment

Enter your comments - 3000 characters max

Type in image code

Submit

 Receive China Post promos Respond to this email