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Straits Times Index Changes: Hutchison Port Holdings Trust to Be Shipped Out; Mapletree Commercial Trust to Replace

Hutchison Port Holdings Trust (SGX: NS8U) will be booted out of the Straits Times Index (SGX: ^STI), Singapore’s stock market bellwether. Instead, Mapletree Commercial Trust (SGX: N2IU), owner of Singapore’s largest shopping mall VivoCity, will take its place.

The changes will be applied after the market close on Friday, 20 September 2019 and will be effective come Monday, 23 September 2019. The index’s co-creators – Singapore Press Holdings LimitedSingapore Exchange Limited, and FTSE Russell – made the announcement yesterday after the stock market closed. The shuffling is part of the September quarterly review of the Straits Times Index (STI).

Differing fortunes  

Hutchison Port Holdings Trust has not been performing well financially over the past years.  And that has caused Hutchison Port Holdings Trust’s unit price, and hence market capitalisation, to fall dramatically. Since Hutchison Port Holdings Trust’s initial public offering (IPO), its market capitalisation has plunged 84% to around US$1.4 billion, the smallest among the 30-stock Straits Times Index.

Mapletree Commercial Trust, on the other hand, has had better fortunes.

Its unit price has more than doubled since its IPO. With the growing distribution per unit (DPU) added to the fray, its total unitholder returns are much higher. To know more about the REIT and its financial performance since listing, you can head here. Mapletree Commercial Trust is also one of my favourite companies to buy in 2020.

Year-to-date, Hutchison Port Holdings Trust’s units have tumbled 36% while Mapletree Commercial Trust’s unit price has risen 38%.

Benchwarmers

Before being included into the STI, Mapletree Commercial Trust was part of the STI reserve list. This list contains five highest-ranking non-constituent STI shares by market capitalisation. If any of the index components become ineligible to continue being part of the STI, it would be replaced by those on the STI reserve list.

With the inclusion of Mapletree Commercial Trust into the STI, Mapletree Industrial Trust (SGX: ME8U) steps up to the plate in the reserve list. Here’s a list of the updated five benchwarmers, which are all real estate investment trusts (REITs):

  1. Mapletree Logistics Trust (SGX: M44U);
  2. Suntec Real Estate Investment Trust (SGX: T82U);
  3. Mapletree Industrial Trust;
  4. Keppel REIT (SGX: K71U); and
  5. Mapletree North Asia Commercial Trust (SGX: RW0U).

With that change, all Mapletree entities are part of either the STI or the reserve list. The next index review is slated to take place in December 2019.

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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 Limited, Mapletree Commercial Trust, Mapletree Industrial Trust and Mapletree Logistics Trust. Motley Fool Singapore contributor Sudhan P owns shares in Singapore Exchange.