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Straits Times Index - An Overview

Straits Times Index - An Overview

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Published by benoyp
This is an attempt to understand the Straits Times Index, its compositions and its functioning. A sneak peak of the Singapore Economy is also covered.
This is an attempt to understand the Straits Times Index, its compositions and its functioning. A sneak peak of the Singapore Economy is also covered.

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Published by: benoyp on Dec 26, 2009
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03/31/2011

 
Straits Times Index
Part of Singapore Stock Exchange (SGX)
Benoy Paul Jose.Chennai Business School – BFS Varsity.
 
12/25/2009
  This is an attempt to understand the Straits Times Index, its compositions and itsfunctioning. A sneak peak of the Singapore Economy is also covered.
 
Snap Shot
1.Introduction.2.Weighting & Calculations.3.Eligibility.4.Index facts.5.Singapore economy.
I
NTRODUCTION
 
 The Straits Times Index (also called the STI) is the benchmark index forthe Singapore Exchange.
It covers 30 companies which are deemed representative of the Singaporemarket.
 The Singapore Exchange works with the UK Based Financial Times StockExchange 100 Index (UKX-LN) in order to maintain the FTSE ST IndexSeries.
W
EIGHTING
& C
ALCULATIONS
 
 The STI was evolved as a market capitalization weighted index. It involvesthe total market capitalization of the companies weighted by their effecton the index.
So the larger stocks would make more of a difference to the index ascompared to a smaller market cap company.
 The basic formula of the index is :Index level=
Σ
[(Price of stock * Number of shares)* Free float factor] /IndexDivisor.
 
E
LIGIBILITY 
 
All classes of the ordinary shares in issue the exchange are eligible forinclusion in the STI.
Convertible preference shares and loan stocks are excluded untilconverted. Companies whose business is that of holding equity and otherinvestments.
Free float restrictions apply to all stocks, but the stock has to have at least15% of the shares being traded on the exchange at any given time.
 The securities must have a turnover of at least 0.05% of their shares inthe market (after the application of any kind of weighting) based on amedian daily trade per month in ten of the twelve months of the year.
I
NDEX
F
ACTS
 
 The 30 representative companies.
Sector Breakdown.

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