Dear readers, the Singapore Straits Times Index (STI) closed at 3,071.23 on 17 Sep 2021.
In the last 10 years, the STI reached the highest of close to 3,600.
Currently, the constituents of the STI are as follows.
Ascendas Reit
Capitaland stock
Capitaland Integrated Commercial Trust
City Development stock
ComfortDelgro stock
DairyFarm stock
DBS stock
Frasers Logistics and Commercial Trust
Genting Singapore stock
Hongkong Land
Jardine C&C stock
Jardine Matheson Holdings stock
Keppel Corporation stock
Keppel DC Reit
Mapletree Commercial Trust
Mapletree Industrial Trust
Mapletree Logistics Trust
OCBC stock
SATS stock
Sembcorp Industries stock
SGX stock
SIA stock
Singtel stock
ST Engineering stock
Thai Beverages stock
UOB stock
UOL stock
Venture stock
Wilmar International stock
YangZiJiang stock
As a veteran investor, I have noticed that in the last decade, there has been a fundamental change in the composition of the STI, notwithstanding the narrative that Singapore’s STI, at any one point, is generally made up of the top 30 Singapore’s stocks in terms of market cap. The fundamental change is none other than the inclusion of more Reits and Trusts.
Based on the current composition, we have 7 such Reits and Trusts. In my view, these Reits and Trusts help stabilize Singapore’s stock market benchmark. By virtue of the higher-dividend nature of these Reits and Trusts, these Reits and Trusts may also help boost the dividend yield of the STI.
As compared to overseas stocks markets which have made much headway in the last decade, Singapore’s STI has never exceeded 4,000 in the last decade. But that may change in the future and Singapore’ STI may even double to 6,000 or even 10,000! Let me explain why right now.
Recently, there were some news and initiatives announced that are of interest to local investors. First, SGX could receive its first application for a SPAC listing in the next couple of weeks. And second, and more noteworthy, Singapore government will co-invest with Temasek Holdings, starting with S$1.5 billion dollars to help companies raise capital through listing in the city state.
I am optimistic that with the above measures, Singapore’s stock markets will be made more exciting to come, never mind the concerns of lack of liquidity in the local stock markets.
First, if we can have those popular tech unicorns local or overseas making it to the Singapore stocks markets; and
Second, having these tech unicorns included in the STI arising from their market capitalisation making them one of the top 30 market cap listed companies here; and
Third, having more weightage of the STI assigned to them; and
Fourth, if these unicorns keep growing and growing,
We will have a Winner for the unicorn stock, Singapore stocks markets, STI and Singapore investors.
We could see the STI double to 6,000 or even more! What’s more, investors can also directly invest in these unicorns on the SGX themselves to benefit from their possible growth of stock price.
I know at present, the Singapore Stocks markets seem not as dynamic as before and there have not been good precedents of tech stocks with international fame doing well on local bourse. The best example I could think of is our Creative Technology Ltd stock but even for this stock, it has gone down from around $6.60 in year 2018 to $2.28 on 17 Sep 2019.
Hence, I am cautiously optimistic and I think local investors should support what the government and SGX are doing now to boost the local stock markets. This will be a good attempt to let our STI break new grounds to double the current 3,000 to 4,00 level or beyond and perhaps attract the larger community of international institutional and retail investors to Singapore stocks markets!
That’s it for my insights today. I Thank you once again for your support of SG STOCKS INVESTING, your Money and Lifestyle magazine! Connect with me here to follow the daily exciting and useful posts on these two blogs, Thank You for your support!
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