Venture Corporation Ltd Is Now A Candidate For The Straits Times Index

The Straits Times Index (SGX: ^STI), the most prominent stock market benchmark in Singapore, is made up of 30 different companies.

These 30 companies are reviewed on a quarterly basis to determine whether any changes should be made. The review also brings up five companies for the reserve list. These “benchwarmers” are meant to step up to the plate should any existing Straits Times Index constituent drop out for whatever reason.

The latest review revealed that contract manufacturer Venture Corporation Ltd (SGX: V03) is now in the reserve list. Because of this, the company could well find its way into the Straits Times Index in the future.

The five amigos

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

1. The previous reserve list consisted of logistics provider Sembcorp Marine Ltd (SGX: S08), Keppel REIT (SGX: K17), Suntec Real Estate Investment Trust (SGX: T82U), Yanlord Land Group Limited (SGX: Z25), and Mapletree Commercial Trust (SGX: N2IU).

2. The new list, released on 31 August 2017, sees Yanlord Land Group and SembCorp Marine drop out, to be replaced by SIA Engineering Company Ltd (SGX: S59) and Venture Corporation. As part of the review, SIA Engineering had been dropped from the Straits Times Index.    

3. Some of the reserve companies are connected to existing members of the Straits Times Index. SIA Engineering’s parent company Singapore Airlines Ltd (SGX: C6L) is one of the 30 companies in the index. Keppel Corporation Limited (SGX: BN4), which owns 45% of Keppel REIT, is also an index component.   

4. The reserve list has three real estate investment trusts (REIT). REITs are increasingly prominent within the Straits Times Index. 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).

5. As of 30 August 2017, The SPDR STI ETF (SGX: ES3) offered a dividend yield of 3.05% and has a trailing price to earnings ratio of 11.55. The SPDR STI ETF is an exchange traded fund that mimics the fundamentals of the Straits Times Index.

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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 CapitaLand Mall Trust. Motley Fool Singapore contributor Chin Hui Leong owns shares in Suntec REIT and CapitaLand Mall Trust.