In Lady Gaga’s style, the Singapore stock market benchmark, the Straits Times Index (SGX: ^STI), has “asked” telco StarHub Ltd (SGX: CC3) to stop telephonin’ me – that’s because StarHub will soon be dropped from the STI. Taking its place will be pan-Asian retailer, Dairy Farm International Holdings Ltd (SGX: D01).
The index’s co-creators – Singapore Press Holdings Limited (SGX: T39), Singapore Exchange Limited (SGX: S68), and FTSE Russell – made the announcement today after the stock market closed. The changes are part of the September quarterly review of the index.
The replacement of StarHub with Dairy Farm will take place after the close of business on 21 September 2018 and will be effective on 24 September 2018.
Dairy Farm’s share price (in US dollar terms) is up some 13% year-to-date, but StarHub’s share price has plummeted by 42% over the same time frame.
With Dairy Farm’s inclusion, the Jardine group’s influence on the Straits Times Index will increase. The index already contains the following Jardine group of companies: Jardine Cycle & Carriage Ltd (SGX: C07), Jardine Matheson Holdings Limited (SGX: J36), Jardine Strategic Holdings Limited (SGX: J37) and Hongkong Land Holdings Limited (SGX: H78).
Meanwhile, the STI reserve list, which comprises the five highest ranking non-STI stocks by market capitalisation, will all be real estate investment trusts (REITs). They are (in order of size):
1) Suntec Real Estate Investment Trust (SGX: T82U);
2) Mapletree Commercial Trust (SGX: N2IU);
3) Keppel REIT (SGX: K71U);
4) Mapletree Logistics Trust (SGX: M44U); and
5) Mapletree Industrial Trust (SGX: ME8U).
The five aforementioned REITs on the reserve list will replace any Straits Times Index component that becomes ineligible due to corporate actions, before the next review. Mapletree Industrial Trust replaced Sembcorp Marine Ltd (SGX: S51) on the reserve list during the September review.
The next review is scheduled to take place in December 2018.
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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 Dairy Farm International Holdings Ltd, Singapore Exchange Limited and Hongkong Land Holdings Limited, and units of Mapletree Commercial Trust and Mapletree Industrial Trust. Motley Fool Singapore contributor Sudhan P owns shares in Singapore Exchange Limited and Hongkong Land Holdings Limited.