A Quick Look at the Next 5 Candidates for the Straits Times Index

The Straits Times Index (SGX: ^STI) is made up of 30 different stocks.

These 30 companies are reviewed on a quarterly basis to determine whether any changes should be made. Along with it, five companies will typically be earmarked in the reserve list. These “Benchwarmers” are ready to step up to the plate if a Straits Times Index constituent should drop out.   

The five amigos

Here’re a few things that investor might want to know about the benchwarmers:

  1. The latest reserve list consists of Singapore Post Limited (SGX: S08), Keppel REIT (SGX: K17), Suntec Real Estate Investment Trust (SGX: T82U), Mapletree Industrial Trust (SGX: ME8U) and Mapletree Commercial Trust (SGX: N2IU).
  2. Interestingly, there are four real estate investment trusts (REIT) in the reserve list. At the moment, there are three other REITs in the Straits Times Index, namely CapitaLand Commercial Trust (SGX: C61U), CapitaLand Mall Trust (SGX: C38U) and Ascendas Real Estate Investment Trust (SGX: A17U).
  3. Keppel REIT’s parent company, Keppel Corporation Limited (SGX: BN4) is also one of the 30 companies that make up the Straits Times Index.
  4. The SPDR STI ETF (SGX: ES3) offered a dividend yield of 3.2% as of 7 September 2016. The SPDR STI ETF is an exchange traded fund that mimics the fundamentals of the Straits Times Index. All four REITs have a distribution yield that exceeds 3.2%.
  5. It’s not all sunshine and roses, though. Singapore Post has been beset with concerns over its corporate governance and management departures. Singapore Post’s chairman, Simon Israel, had said that the firm’s dividend policy will have to be reviewed to ensure that it is sustainable.

To keep up to date on the latest financial and stock market news, sign up for a FREE subscription to The Motley Fool's weekly investing newsletter, Take Stock Singapore

Also, like us on Facebook to follow our latest hot articles. The Motley Fool's purpose is to help the world invest, better.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong owns shares in Suntec REIT.