The Business Times
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THINKING ALOUD

Time to revamp and relaunch the STI?

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    • The question that should be asked, both by index providers and the committee set up to study ways to inject more interest in local stocks, is whether to stick with the STI in its current form with such a lopsided dependence on the banks and property, or to revamp it to ensure broader coverage and adequate diversification.
    • The question that should be asked, both by index providers and the committee set up to study ways to inject more interest in local stocks, is whether to stick with the STI in its current form with such a lopsided dependence on the banks and property, or to revamp it to ensure broader coverage and adequate diversification. PHOTO: BT FILE

    R Sivanithy

    Published Tue, Dec 3, 2024 · 05:00 AM

    IT WOULD not have escaped the attention of those who watch developments in the local stock market that the Straits Times Index (STI) owes most of its rises over the past few years to the record-breaking gains in the three banks.

    In fact, for many days in November as the STI broke above 3,600 and then 3,700, setting fresh 17-year highs along the way, the broad market actually weakened, recording more falls than rises each day.

    This is because as at Oct 31, the combined weighting of the three banks was 51 per cent, followed by property at close to 17 per cent. This means that these two sectors account for two-thirds of an index whose 30 components cover about two-thirds of the whole market.

    Straits Times IndexSingapore stock marketSingapore StocksThinking Aloud

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