The Straits Times Headline: STI fall below 3,000 points

[felixleong]

3000 level feels like a magnet~
STI gained 1% today to close at 2988
think we gonna be around this level for sometime, until something happens again

[pantoo]

Based on your reply above, does it mean to say that resultant index is not affected by a change in components? So for example, if a huge market cap stock (larger than Singtel) comes on board the STI, the index will not automatically increase due to the large market cap?

the capping factor will be changed to keep the index unchanged upon the replacement (albeit temporarily). So by right for each index component in the STI, you can find the 3 distinct factors for each (i.e. its actual weight)

so: market cap of previous component*factor(previous)= market cap of new component*factor(new)

I did a quick google to find some "proof"

http://www.sph.com.sg/article.display.php?id=76

you can see the updated factors in the article (albeit in 2003! - too lazy to find newer examples)

********************************

Changes to The Straits Times Index

Following a review of the Straits Times Index (STI), three changes will be made to the component stocks of the index at the start of trading on Tuesday, 1 April 2003.

Hotel Properties, Marco Polo Developments and United Industrial Corporation will be replaced by MobileOne, Allgreen Properties and People’s Food. The main criteria used in the review were liquidity, as measured by average daily value traded, and market capitalisation.

In addition, following the merger of Delgro and Comfort, the new merged entity, ComfortDelgro, will become a component stock of the STI at the start of ComfortDelgro’s second day of trading. Delgro, which is currently a listed stock, will be removed from the STI upon its delisting from the Singapore Exchange on March 31.

The weight factors of several index stocks will also be updated on Tuesday, 1 April 2003 to reflect corporate actions that have taken place. (See table below.)

Patrick Daniel, Managing Editor of English and Malay Newspapers, Singapore Press Holdings Limited, who chaired the STI Review Committee, said: "With these changes, the 45 stocks in the STI continue to capture a high 77% of the average daily value traded on the SGX and 72% of the market capitalisation of stocks listed on the SGX."

Contact person
Julie Wee,
Tel: 6319 5367
Email: juliew@sph.com.sg

STI Review Committee
The Straits Times
Singapore Press Holdings Limited
25 March 2003

Table of index stocks with new weight factors

Name Current weight factor New weight factor
1 Allgreen Properties - 0.40
2 Chartered Semiconductor 0.30 0.40
3 ComfortDelgro - 0.85
4 Creative Technology 0.60 0.65
5 Datacraft 0.40 0.50
6 GES International 0.45 0.70
7 Hotung Investment 0.65 0.75
8 MobileOne - 0.60
9 Parkway Holdings 0.60 0.80
10 People’s Food - 0.25
11 ST Assembly 0.25 0.30
12 SembCorp Industries 0.47 0.50
13 Singapore Exchange 0.70 0.95
14 United Overseas Land 0.50 0.55
15 Venture 0.65 0.70

Thank you for your sharing!