STI bounces on MSCI's 'A' share decision

AFTER falling 55 points in four consecutive sessions from Thursday last week to Tuesday this week, the Straits Times Index (STI) on Wednesday bounced 30.64 points or 0.93 per cent to 3,325.77 after news that MSCI will not be including China "A" shares in its Emerging Markets (EM) index yet. Some of the selling last week was because of speculation that if MSCI did decide on the "A" share inclusion, Singa-pore's weighting would have to be reduced.

"This is a relief bounce, not rally," said a dealer. "The market is relieved that Singapore's weighting won't be cut. Of course, when and not if MSCI decides to bring 'A' shares in, the whole drama might be replayed."

From May 29, when the MSCI announced that it was considering introducing "A" shares, to the start of trading on Wednesday, the STI had fallen about 98 points.