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The Straits Times Index

Index of the Singapore Stock Exchange

Concerning the main stock exchange markets of the East Asia, Singapore is one of the most important ones. Its index is the Straits Times Index also called STI, evaluated by its value and weighted according to the stock market based on investment stocks of 30 companies represented and listed on the Singapore Stock Exchange. When a big reclassification of the sector was made a new list of companies of the Singapore Exchange were taken out, creating a new category not only for industrial companies but also for others. A new index was born and substituted the previous called Straits Times Industrials Index. aaa The STI began its trading history on August 1998 with a starting rate of 885.26 points that continued to increase until the end of the day. At that time, it corresponded to more than the 78% of the total value in a year time and about the 60% of the full capitalization of the exchange market. To be part of the Straits Times Index a company must be considered eligible according to some rules because of a security reason. All the kinds of classes of the ordinary shares of a Singapore company present in the STI are entitled to be included in the Straits Times Index.

Moreover, the convertible preference and loan stocks are not included until the moment of the conversion, especially for Investment Trusts or similar. The main companies and people who created the institution of the Strait’s market index are Singapore Management University, Singapore Press Holding, Professor Tse Yiu Kuen, a famous professor in Economics and the Singapore Exchange. A formal assessment about the exchange procedures and the stock market trend is usually taken once a year, or if needed other reviews can be organized on other periods.

STI Sectors Weighting
Industrial 16.95%
Real Estate15.64%
Food & Beverage8.76%
Oil & Gas8.62%
Travel & Leisure8.46%
Financial Services2.98%
Media 2.23%
Retail 1.85%
During one of the past meetings, the numbers of the Singapore stocks were increased from 45 to 50, influencing the market when the trading restarted. This increase represented a decrease of the total value in a year time at about the 60% while the full capitalization of the exchange market increased to 75%. The restriction for the free float is applied for the entire group of shares, and the stocks must have a minimum of 15% of their portion allocated on the trading market at any time.

For safety reasons, the securities must have a turnover of a minimum of 0.05% of their stocks on the market. According to the average, medium daily trading of the shares per month are 10 to 12 months per year. The FTSE Group of London, the Singapore Exchange and the Singapore Press Holdings declared on June 2007 that The Straits Times Index had to be renovated at the end of the year.

The total number of the participants of the group stocks were reduced from 50 to 30, and new indices were about to be conceived. Among the new entries Labroy Marine, Suntec REIT, Thai Beverage Corporation, Olam Company, Capita Commercial Trust, and Genting International were added. While Dairy Farm Holding, Haw Par Corporation and TPV Technology and BIL were not anymore listed on the stock market.

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The Straits Times Index