10 Most Important Blue Chips in the Straits Times Index

The Straits Times Index (SGX: ^STI) is widely regarded as the market barometer of the Singapore stock market. So, it might be worth taking time to understand the inner workings of the Straits Times Index.

To facilitate this study, we can take a look at this SGX report. As a note, Jardine Strategic Holdings Limited (SGX: J37) is expected to take the place of SIA Engineering Company Ltd (SGX: S59) from 18 September onwards.

With that in mind, we will be looking at the companies with the highest projected weighting in the index after Jardine Strategic Holdings makes its entry.

Here, then, are the top ten most influential companies (for the top five, head here):

6. The sixth and seventh places belong to Hongkong Land Holdings Limited  (SGX: H78) and newcomer Jardine Strategic Holdings Limited. The latter owns stakes in Jardine Matheson Holdings Limited (SGX: J36), Jardine Cycle & Carriage Ltd (SGX: C07) and Hongkong Land Holdings. Together, the quartet of companies with ties to Jardine makes up 15.5% of the index weighting.  

7. Keppel Corporation Limited (SGX: BN4) occupies the eighth spot with a weightage of 3.1%. The influence of oil and gas companies on the index has waned after the Sembcorp Marine Ltd (SGX: S51) was removed in September last year.

8. Meanwhile, Thai Beverage Public Company Limited (SGX: Y92) is the highest ranked consumer staples companies within the Straits Times Index. The Thailand-based food and beverage company is also in the eighth spot with a 3.1% weightage.

9. CapitaLand Limited (SGX: C31) is the third company tied for eighth place with a matching 3.1% weightage. The real estate developer has stakes in another two Straits Times Index components, namely CapitaLand Mall Trust (SGX: C38U) and CapitaLand Commercial Trust (SGX: C61U).

10. The top ten companies would make up almost 69% of the Straits Times Index. In other words, the top ten companies will have an outsized influence over the future movements of the Straits Times Index.

It is worth noting that that sectors such as real estate and industrials make up 18% and 22.4% of the Straits Times Index. As such, these industries might also may hold some sway on the movements of the 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 Singapore Exchange, Hongkong Land Holdings, and CapitaLand Mall Trust. Motley Fool Singapore contributor Chin Hui Leong owns shares in Hongkong Land Holdings and CapitaLand Mall Trust.