Meet The 5 Candidates That Are Next-In-Line To Join the Straits Times Index

Singapore’s stock market barometer, 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.

There will also typically be five companies that are in the reserve list. These benchwarmers are supposed to be the ones to step up to the plate should any existing Straits Times Index constituent drop out.

The five new amigos

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

  1. The previous reserve list consisted 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. The new list, released on 1 December 2016, sees Mapletree Industrial Trust (SGX: ME8U) being replaced by oil palm producer First Resources Ltd (SGX: EB5).
  3. There are three real estate investment trusts (REIT) in the reserve list. At the moment, there are three other REITs in the Straits Times Index and they are namely CapitaLand Commercial Trust (SGX: C61U)CapitaLand Mall Trust (SGX: C38U), and Ascendas Real Estate Investment Trust (SGX: A17U).
  4. Keppel REIT’s parent company, Keppel Corporation Limited (SGX: BN4), is also one of the 30 companies that currently make up the Straits Times Index.
  5. The SPDR STI ETF (SGX: ES3) offered a dividend yield of 3.1% as of 1 December 2016. The SPDR STI ETF is an exchange traded fund that mimics the fundamentals of the Straits Times Index. All three REITs in the reserve list have a distribution yield that exceeds the 3.1% hurdle.

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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 owns shares in Suntec REIT.