SGX Market Updates

Venture Corporation Scheduled to Join STI on 5 January


PUBLISHED ON |

03 January 2018

  • Venture Corporation is expected to join the STI effective Friday 5 Jan, with the last trading day of existing STI constituent, Global Logistic Properties, expected to be 4 Jan. Venture was selected as it maintained the highest market capitalisation of the STI Reserve on the 2 Jan close.

  • Venture generated a 115.4% total return in 2017, with institutional net buying totaling S$133 million. The leading global provider of technology services, products and solutions reported its net profit grew 81.4% YoY for its 9MFY17 ending 30 Sep.

  • Venture is expected to make up between 1.5% and 2.0% weightage in the STI, based on public free-float information and STI weights as of 29 Sep 2017. The IT Sector will then be represented within the STI and the Real Estate Sector is expected to reduce its weightage in the STI by 3.0% to 15.6%.




The Straits Times Index (STI) is the most globally-recognised benchmark index and market barometer for Singapore.

Last year the STI generated a 22.0% total return compared to the MSCI World Index gaining 13.7% (click here for more details). The STI’s five best performing stocks of 2017 included Yangzijiang Shipbuilding Holdings, Global Logistic Properties (“GLP”), City Developments, UOL Group and Genting Singapore PLC.

As many as 13 STI constituents featured amongst the five best performing STI stocks for each of the past three years. The business diversity of the STI stocks is set to widen even more with the scheduled inclusion of Venture Corporation on 5 January 2018, replacing Global Logistic Properties.

As noted by FTSE Russell (click here) Venture Corporation (“Venture”) is expected to join the STI effective 5 January, with the last trading day of existing STI constituent GLP expected to be 4 January. Venture was selected as it maintained the highest market capitalisation of the STI Reserve on the 2 January close. The other four stocks of the STI Reserve List are Suntec REIT, Mapletree Commercial Trust, Keppel REIT and Sembcorp Marine



Potential New STI Weights 

Based on STI weightings on 29 September 2017, GLP had previously maintained a 3.3% weight in the STI whereas Venture, based on its 29 September free-float capitalisation, would have maintained a 1.6% weight in the Index.

However, since the end of the September quarter, Venture has rallied 21.5%, compared to the STI gaining 6.4%. Without taking into considerations the performances of all STI constituents, the recent relative performance of Venture indicates that its weight in the STI could be as high as 1.8% upon inclusion on 5 January.

The potential new weightings based on publically available weights dating back to the 29 September 2017 are tabled below. Click on the stock name to see its full profile in SGX StockFacts.

Name SGX
Code
29 Sep 2017
Index Weight
%
NEW
Indicative Weight
based on
29 Sep 2017
data
GICS® Sector
Global Logistic Properties MC0 3.34 N/A Real Estate
DBS Group Hldgs D05 12.89 13.13 Financials
Oversea-Chinese Banking Corp O39 12.63 12.86 Financials
United Overseas Bank U11 10.39 10.58 Financials
Singtel Z74 9.47 9.64 Telecommunication Services
Jardine Matheson Hldgs J36 6.16 6.27 Industrials
Hongkong Land Hldgs H78 3.95 4.02 Real Estate
Jardine Strategic Hldgs J37 3.68 3.75 Industrials
Keppel Corp BN4 3.22 3.28 Industrials
CapitaLand C31 3.11 3.17 Real Estate
Thai Beverage PCL Y92 3.05 3.11 Consumer Staples
Genting Singapore PLC G13 2.34 2.38 Consumer Discretionary
Ascendas REIT A17U 2.19 2.23 Real Estate
Wilmar International F34 2.14 2.18 Consumer Staples
Singapore Exchange S68 2.1 2.14 Financials
City Developments C09 1.84 1.87 Real Estate
Singapore Technologies Engineering S63 1.81 1.84 Industrials
Singapore Airlines C6L 1.77 1.8 Industrials
CapitaLand Mall Trust C38U 1.6 1.63 Real Estate
Venture Corp V03 N/A 1.57 Information Technology
SPH T39 1.5 1.53 Consumer Discretionary
ComfortDelGro C52 1.47 1.5 Industrials
Jardine Cycle & Carriage C07 1.35 1.37 Consumer Discretionary
CapitaLand Commercial Trust C61U 1.34 1.36 Real Estate
UOL Group U14 1.33 1.35 Real Estate
Hutchison Port Hldgs Trust NS8U 1.02 1.04 Industrials
Yangzijiang Shipbuilding Hldgs BS6 1.02 1.04 Industrials
SATS S58 1.01 1.03 Industrials
Sembcorp Industries U96 0.93 0.95 Industrials
Golden Agri-Resources E5H 0.83 0.85 Consumer Staples
StarHub CC3 0.52 0.53 Telecommunication Services

Source: FTSE Russell (www.ftse.com/products/indices/SGX-ST) , SGX My Gateway, SGX StockFacts. 
Note weights above are only indicative and based on relative weightings on 29 September 2017. Industry Classification Benchmark (ICB) weightings for the 10 biggest constituents will be available from FTSE Russell in early February here.



New Sector Weights

The potential sector weightings of the STI (based on 29 September 2017 prices) including GLP, and then the inclusion of Venture in place of GLP, are illustrated below. Note the Real Estate Sector is expected to see its Index weightage trimmed by approximately 3.0%.



Source: FTSE Russell (www.ftse.com/products/indices/SGX-ST), SGX My Gateway, SGX StockFacts.
Industry Classification Benchmark (ICB) Sector weightings will be available from FTSE Russell in early February here.



The inclusion of Venture into the STI means the STI will now include the Information Technology (“IT”) Sector. As noted yesterday (click here) the IT Sector was the strongest of the Sectors in Singapore in 2017. Venture generated a 115.4% total return in 2017, with institutional net buying totaling S$133 million. The leading global provider of technology services, products and solutions reported its net profit grew 81.4% YoY for its 9MFY17 ending 30 September. 

Venture was founded in 1984 as a global electronics services provider. Today, it is a leading global provider of technology services, products and solutions with established capabilities spanning marketing research, design and development, product and process engineering, design for manufacturability, supply chain management, as well as product refurbishment and technical support across a range of high-mix, high-value and complex products.  For more details click here



STI Reserve List 

The STI is a free float adjusted market capitalisation weighted index representing the performance of the largest Singapore stocks which pass the size, free float, and liquidity screens.

The STI Reserve List is used in the event that one or more of the STI constituents are deleted during the period up to the next quarterly review. As detailed in the STI Ground Rules (click here) when a company is going to be removed from the STI the vacancy will be filled by selecting the highest ranking security by full market value in the Reserve List as at the close of the index calculation two days prior to the deletion.

There are further qualifications for the framework of the STI Reserve List in the case as Mergers, Restructuring and Complex Takeovers as described in Section 6.4 of the STI Ground rules.







This article is provided by SGX My Gateway.



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