Semi-annual review changes STI constituents

SINGAPORE — UOL Group, Yangzijiang Shipbuilding Holdings and SATS will replace Jardine Matheson Holdings, Jardine Strategic Holdings and Olam International as constituents of the Straits Times Index (STI) following the conclusion of a semi-annual review.

The changes will take effect on Sept 21, said Singapore Press Holdings, Singapore Exchange and FTSE Russell in a joint statement yesterday.

“In response to market demand, a recent market consultation showed strong support for the introduction of an enhanced liquidity rule for the STI beginning with this review,” the statement said.

Under the new liquidity rule, STI component stocks are required to have a higher percentage of their issued shares traded in a given period.

The STI reserve list, with the five highest-ranking non-constituents of the STI by market capitalisation, will be, by size: CapitaLand Commercial Trust, Singapore Post, Suntec REIT, Keppel REIT, and M1.

Companies on this list will replace constituents that become ineligible as a result of corporate actions, before the next review on Dec 3.

The current STI liquidity rule removes stocks that fall below 15 per cent free-float, and tests each security’s liquidity semi-annually in March and September by calculation of its median daily trading per month.

To be eligible, securities must turn over at least 0.05 per cent of their shares in issue based on their median daily trade per month in 10 of the 12 months prior to the March or September review.

For existing constituents, securities must trade at least 0.04 per cent of its shares in issue in 8 of the 12 months.

Under the new rule, securities must turn over at least 0.1 per cent of their shares in issue based on their median daily trade per month in 10 of the 12 months prior to the March or September review.

For existing constituents, securities must trade at least 0.08 per cent of their shares in issue in eight of the 12 months.