Dear readers, let me reveal Six Straits Times Index (STI) stocks which are cheaper than the Straits Times Index in this post.
The Straits Times Index (STI) now trades at a Price-to-Earnings ratio of 11.06 as measured from the Price-to-Earnings ratio of the STI ETF (ES3.SI). The following Six Straits Times stocks currently trade below the Price-to-Earnings ratio of the STI as shown from their Price-to-Earnings ratios below.
| Mapletree Commerical Trust | 10.75 |
| CapitaLand | 10.19 |
| OCBC Bank | 9.76 |
| DBS | 9.34 |
| UOB | 8.93 |
| Jardine C&C | 6.93 |
As a result, we can say factually that the above six Straits Times Index stocks are cheaper than the STI. But if we are to look at the reality of the macro stocks markets now which are facing slowing economies amidst Covid-19, the Price-to-Earnings ratio of the STI at 11 looks a tad high.
In fact, I have shared that in the last financial crisis of 2008, the STI Price-to-Earnings ratio went to as low as 6. I would say that the STI is now currently overvalued at this Price-to-Earnings ratio. The overvalued of the STI is not surprising given that investors flock to the stocks markets in this low interest environment.
I would think the Price-to-Earnings ratio of the STI on the back of this stocks markets backdrop should be about 9.
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