The STI has opened the week at 3423, that is 542 points, or 18.8%, above the 2016 end of year level of 2881. This is the strongest YTD price gain since the 19.7% gain in 2012. Dividend distributions of STI constituents boost the STI’s YTD total return to 22.2%.
This year’s STI price performance has been stronger than the long term average annualised gain, which dating back to the end of 1985 is 6.2% p.a. This does not include the STI dividend yield which has averaged 3.5% since 1999.
10 January 2018 will mark 10 years since SPH, SGX and FTSE Group revamped the STI as well as the other 18 new indices of the FTSE ST Index Series. This follows 2017 being the 50 year anniversary for the STI and the 15 year anniversary of the listing of the first STI ETF.
The Straits Times Index (STI) opened this week at 3423, some 542 points, or 18.8% above the 2016 end of year level of 2881. To date, this has been the strongest annual price performance for the Singapore benchmark since 2012, when the STI gained 19.7%.
The STI maintains one of the region’s highest dividend yields, with 2017 year-to-date distributions boosting the STI’s total return to 22.2%. This compares to year-to-date total returns of 14.7% for the FTSE All World Index and 13.7% for the MSCI World Index. Note the performances of the global benchmarks are converted to SGD terms, and total returns assume dividends are reinvested.
A long term composite chart of the annual STI performances is illustrated below. The previous form of the STI is used for the years 1986 through to 2007, and the revamped STI is used from 2008 onwards.
Straits Times Index (1986-Current)
Source: SGX, Bloomberg (Data as of 18 Dec 2017).
HLC Price Bars consist of year high, year low and year close.
Since the end of 1985 (when the STI was at 499.73) through to this morning’s open, the STI generated an average annualised price return of 6.2%. This period of time has spanned almost 32 years. This annualised price return does not include dividend distributions – the average annual dividend yield of the STI going back to the end of 1998 is 3.5%.
Since the end of 1998 the STI’s strongest years in price gains were:
1999 (+78.0%), 2009 (+64.5%), 2003 (+31.6%), 2006 (+27.2%) and 2012 (+19.7%).
The least performing years of the STI since 1998 were:
2008 (-49.4%), 2000 (-22.3%), 2002 (-17.4%), 2011 (-17.0%) and 2001 (-15.7%).
Since the end of 1998, the annualised price gain of the STI was 4.9%. As noted above, the STI has also averaged a 3.5% dividend yield since the end of 1998.
STI History & Revamp
2017 marked the 50 year anniversary of the STI which has provided an ongoing performance benchmark for the Singapore stock market since the beginning of 1967. This was initially in the form of the Straits Times Industrials Ordinary Share Index, which then measured the price moves of industrial stocks.
In its original form the Index was regularly illustrated in the Business Times which was then a Commercial and Financial Section within the Straits Times. Five years on from the base price of 100 on 30 December 1966, Singapore was well into its export promotion phase and the Straits Times Industrials Ordinary Share Index had reached 200.
The modern day form of the STI is very different to Straits Times Industrials Ordinary Share Index, which pre-dated the formation of the Stock Exchange of Singapore (SES) in 1973. However significant economic lineage remains a key strength of the STI. The foundations of the current 30 STI stocks span as many as three centuries – from the Jardine Matheson Group in the 1880s to Hutchison Port Holdings Trust in the 2010s.
Looking ahead, 10 January 2018 will mark 10 years since Singapore Press Holdings (SPH), Singapore Exchange (SGX) and FTSE Group revamped the STI as well as the other 18 new indices of the FTSE ST Index Series. To ensure continuity, the opening value of the revamped STI on 10 January 2008 was the same as the closing value of the previous STI on 9 January 2008.
Constituent Performances in 2017 YTD
In the 2017 year the STI has been led by the performances of Yangzijiang Shipbuilding, Global Logistic Properties, Genting Singapore, City Developments and DBS Group Holdings. These five stocks all represented cyclical sectors and the five stocks averaged total returns of 58.5%. The comparative performances of the STI stocks are tabled below. To see more details on each stock in SGX StockFacts, click on the stock name.
|DBS Group Hldgs||D05||62,867||24.580||46.1||15.3||2.6||Financials|
|Jardine Matheson Hldgs||J36||61,738||63.040||8.8||6.6||2.5||Industrials|
|Jardine Strategic Hldgs||J37||60,004||40.170||13.6||6.0||0.8||Industrials|
|Oversea-Chinese Banking Corp||O39||51,506||12.300||42.5||13.4||2.9||Financials|
|United Overseas Bank||U11||43,322||26.050||31.6||13.3||2.7||Financials|
|Thai Beverage PCL||Y92||24,357||0.970||17.3||17.0||2.8||Consumer Staples|
|Hongkong Land Hldgs||H78||22,844||7.200||8.9||3.3||2.7||Real Estate|
|Wilmar International||F34||19,735||3.120||-11.3||10.8||2.1||Consumer Staples|
|Jardine Cycle & Carriage||C07||16,181||40.940||1.6||15.1||2.5||Consumer Discretionary|
|Genting Singapore PLC||G13||16,114||1.340||52.0||25.6||2.2||Consumer Discretionary|
|Global Logistic Properties||MC0||15,783||3.360||55.5||15.1||1.7||Real Estate|
|City Developments||C09||11,048||12.150||48.9||19.0||0.7||Real Estate|
|Ascendas REIT||A17U||7,734||2.680||25.5||16.9||6.7||Real Estate|
|CapitaLand Mall Trust||C38U||7,518||2.120||18.9||11.9||5.3||Real Estate|
|UOL Group||U14||7,188||8.540||45.6||8.0||1.8||Real Estate|
|CapitaLand Commercial Trust||C61U||6,747||1.870||37.7||9.3||5.0||Real Estate|
|Hutchison Port Hldgs Trust||NS8U||4,758||0.405||-6.0||25.2||8.3||Industrials|
|Golden Agri-Resources||E5H||4,839||0.380||-8.4||24.3||1.6||Consumer Staples|
Source: Bloomberg & SGX StockFacts (data as of 15 December 2017).
* Last price of companies are denoted in their respective trading currencies. SGD equivalents are shown in table.
Another key development for the STI over the past 15 years has been the listing of STI Exchange Traded Funds (ETFs) which have made the STI Investable.
Singapore Exchange lists two STI ETFs – SPDR STI ETF and Nikko AM STI ETF. Both offer investors exposure to all the 30 companies that make up the benchmark STI. The SPDR STI ETF listed in April 2002, and the Nikko AM STI ETF listed in February 2009.