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The Top 5 Most Influential Blue Chips in the Straits Times Index

The Straits Times Index (SGX: ^STI) is widely regarded as the barometer for the Singapore stock market.

As such, it might be worth taking some time to understand the inner workings of the index. To facilitate that, we can take a look at the factsheet of the SPDR STI ETF (SGX: ES3).

The SPDR STI ETF is an exchange traded fund that mimics the fundamentals of the Straits Times Index. With the factsheet, we can take a deeper look at the companies with the highest weightage within the Straits Times Index.

Without further ado, here’s the top five most influential companies in Singapore’s market barometer (as of 31 December 2016):

  1. The top two spots are occupied by two Singapore banks, namely, DBS Group Holdings Ltd (SGX: D05) and Oversea-Chinese Banking Corp Limited (SGX: O39). Within the Straits Times Index, the former has a weightage of 12.4% while the latter has a weightage of 11.7%.
  2. Singapore’s largest telecommunications company, Singapore Telecommunications Limited (SGX: Z74), has the third highest weightage at 10.6%. Singtel’s local peer, StarHub Ltd (SGX: CC3), is also part of the Straits Times Index. But, it has a much smaller weighting. All told, the telecommunications sector (made up of Singtel and StarHub) makes up 11.3% of the Straits Times Index.
  3. Not to be left out, the third Singapore bank, United Overseas Bank Ltd (SGX: U11), takes up a weightage of around 10% in the Straits Times Index. The banking sector – which consists of DBS Group, OCBC, and UOB – takes up 34.1% of the Straits Times Index. That’s more than a third of the index, making the banking sector a big influence on the movement of the Straits Times Index.
  4. Last but not least, we have Jardine Matheson Holdings Limited (SGX: J36) with a 6.6% weightage. If we put the three banks and Singtel together with Jardine Matheson, the top five companies would make up 51% of the Straits Times Index. Jardine Matheson is considered as the only company under the general industrials sector.

We have just looked at the top five companies in the Straits Times Index. It is also worth noting that the real estate investment & services sector is an important part of the index – it accounts for 13% of Singapore’s market barometer.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.The  Motley Fool Singapore has recommended shares of United Overseas Bank. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.