Jardine Matheson Holdings Limited Returns to the Straits Times Index: Here’re 5 Quick Things Investors Should Know

Conglomerates are back in while oil and gas is out.

I am talking about the impending addition of conglomerate Jardine Matheson Holdings Limited (SGX: J36) into the Straits Times Index (SGX: ^STI) which will take the place of oil and gas operator SembCorp Marine Ltd (SGX: S51).

With the change, the Straits Times Index’s composition will be changing as well. Here’re are five quick things investors should know:

  1. The big kahuna will still be Singapore Telecommunications Limited (SGX: Z74). Singapore’s biggest telco will have a 12.4% weightage after the inclusion of Jardine Matheson Holdings. Singtel will be the largest piece of the Straits Times Index.
  2. Singapore banks continue make up a large part of the Straits Times Index. The trio of DBS Group Holdings Ltd (SGX: D05), United Overseas Bank Ltd (SGX: U11) and Oversea-Chinese Banking Corp Limited (SGX: O39) make up close to 32% of the new index composition. The trio of banks will take the second to fourth spot in terms of index weightage.
  3. Jardine Matheson Holdings will occupy fifth place with a 6.5% weightage. If we group the conglomerate together with the three banks and Singtel, the quintet will take up over 50% of the weightage in Straits Times Index.
  4. In contrast, the five smallest allocations in the index expected to make up less than 4% of the Straits Times Index weightage. The bottom five include SembCorp Industries Limited (SGX: U96), Golden Agri-Resources Ltd (SGX: E5H), StarHub Ltd (SGX: CC3), Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6) and SIA Engineering Company Ltd (SGX: S59).   
  5. To close the loop, SembCorp Marine had a 0.6% weightage on the Straits Times Index. This stands in contrast with Jardine Matheson Holdings’ future 6.5% weightage.    

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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 doesn’t own shares in any companies mentioned.