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Revamped STI kicks off today with 30 counters - Jan 10, 2008 (BT)

BackJan 10, 2008

The Straits Times / The Business Times News On SPH

Revamped STI kicks off today with 30 counters

New to the index are Wilmar, Yangzijiang Shipbuilding, Yanlord and SIA Engineering.

By Matthew Phan
Jan 10, 2008
The Business Times

(SINGAPORE) A slimmer STI launches today, tracking just 30 stocks instead of the previous 47.

A trial calculation of the new STI, obtained from FTSE and normalised by BT to match the starting value as of Oct 8 last year to that of the original STI, shows that the two trade very much in line. If anything, the new STI marginally outperforms the original index.

On Oct 8, 2007, the original STI had a value of 3,820.31. The trial calculation started the new STI off with a value of 1,000 - so BT adjusted it upwards to take on the same value of the original.

As of the end of the period yesterday, the original STI closed at 3,344.53, while the new STI closed at 3,387.85.

New to the STI are four stocks that investors will be familiar with by now.

The largest of them is market darling Wilmar International, an integrated agribusiness with large interests in palm oil, which saw its market capitalisation soar over five times within the last year - making it the second largest stock on the SGX - after a series of mergers worth some US$4.3 billion was completed in June.

Yesterday, Wilmar's share price closed 40 cents up at $5.60, bringing its market capitalisation to over $35.7 billion.

The next largest addition is Yangzijiang Shipbuilding Holdings, the largest local IPO in 2007, with a market cap of over $6.2 billion at yesterday's close of $1.89.

Yangzijiang builds a wide range of commercial vessels, focusing on container ships but also including bulk carriers, multi-purpose cargo vessels and chemical tankers. It is one of China's oldest and largest shipyard groups.

Then there is Yanlord Land, a high-end property developer in China, which was founded in 1993 in Shanghai, just as home ownership started to take off. At Yanlord's closing price of $2.70 yesterday, it had a market value of about $4.9 billion.

The smallest of the four newcomers could also be the most familiar - SIA Engineering Co (SIAEC).

SIAEC provides airframe and component overhaul services, and also manufactures aircraft equipment. Its shares closed at $4.42 yesterday, giving the company a market value of over $4.7 billion.

The new STI excludes previous stalwarts like ComfortDelGro, Venture Corp, SingPost and Parkway Holdings. Two other stocks, Jardine Matheson and Total Access Communication, were disqualified from even the Mid Cap Index, as a result of other eligibility criteria like trading liquidity.