Six stocks added to STI, four shown the exit - Feb 01, 2007 (ST)

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The Straits Times / The Business Times News On SPH

Six stocks added to STI, four shown the exit

By Lee Su Shyan
Feb 01, 2007
The Straits Times

SIX new stocks will join the Straits Times Index (STI) on Monday while four will be shown the door.

Changes from Monday

IN: Thai Beverage, CapitaCommercial Trust, Suntec Reit, Olam, Genting and Labroy Marine.

OUT: BIL, Dairy Farm, Haw Par and TPV.

In come brewer Thai Beverage, property players CapitaCommercial Trust and Suntec Reit, Olam International, which manages agricultural supply chains, casino operator Genting International and shipping firm Labroy Marine.

Out go BIL International, Dairy Farm International Holdings, Haw Par Corporation and TPV Technology.

The main criterion used in the review is liquidity, which is gauged by looking at the average daily value of a stock over a year of trading.

Market capitalisation and free float - the number of shares in the hands of the public - were also taken into account.

The new 50-strong STI will reflect 51 per cent of the average daily value traded on the Singapore Exchange (SGX) and 64 per cent of the market capitalisation of listed stocks.

As a result of the review, the weighting factors of 13 existing STI stocks will change and weights will be assigned to the six entrants.

Weighting determines the impact of a price change in an individual stock on the index. If a weighting decreases, any price change will have a smaller impact.

Take Venture Corporation. Its weighting will fall from 0.7 to 0.5. This means its price movements will have an even smaller impact on the STI. United Overseas Land, which had its weighting raised from 0.45 to 0.6, will have a greater influence.

The revamp is a regular occurrence but more fundamental changes are on the cards.

Singapore Press Holdings, which owns the STI, the SGX and the FTSE Group agreed late last year to launch a redesigned STI and other new indexes before the end of this year.

The STI will retain its position as the key index to track the Singapore market's ups and downs.