Investors trading with STI Revamp in mind

Investors trading with STI's revamp in mind

THE official revamp of the Straits Times Index (STI) may be three months away but this has not stopped investors from taking its bold new shape into account now in their market decisions.
They have been snapping up stocks which will be components of the new STI, and selling those which have failed to make the cut.

This followed last Friday's unveiling of a slimmer STI, which will be reduced from the current 48 stocks to just 30 in its biggest makeover since 1998. Four new stocks will be included in the new STI while 22 existing counters will be dropped, with most of them moving to either a separate new mid-cap or a small-cap index.

A check of the trial value of the new STI showed that it had gained 0.88 points to 1,000.88 yesterday from a base of 1,000. The current STI dropped 2.31 points to 3,820.31. One stock in the spotlight yesterday was Jardine Matheson Holdings, one of two STI counters to be dropped from the new STI and excluded from both the new mid-cap and small-cap indexes. The other is Total Access Communication (TAC).

The biggest winners were some of the new inclusions. Shipbuilder Yangzijiang Shipbuilding (Holdings) and palm oil giant Wilmar International. Wilmar rose eight cents to $3.92 on a volume of 6.01 million shares while Yangzijiang gained 17 cents to $2.60 with a staggering 50.2 million shares traded.

Of the other two entrants, real estate developer Yanlord Land Group ended flat while aircraft servicing firm SIA Engineering fell two cents to $4.78 with 1.79 million shares traded.
But Jardine Matheson topped the losers after shedding 70 US cents to US$28.30. TAC, however, kept its posture, gaining two US cents to US$1.33 on a thin volume of 94,000 shares.

The trial values of the STI and 18 new FTSE ST Indexes can be viewed at www.ftse.com/st

Source: The Straits Times

Hint: Look and relook at the new ST Index.... and buy more of those stocks that will be included!!

James Wealthmanagement