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					  Introducing the
   Revamped STI
        and
New FTSE ST Indices
Tan Suan Hui
Assistant Vice President, Listings
Singapore Exchange Ltd

5th June, 2007
Benefits for the Singapore market
•   Build internationally accepted benchmarks for the Singapore equities
    market

     • Ease in tracking and analysing different sectors of the market

     • Use of globally accepted methodology



•   Encourage creation of index linked products (eg. ETFs, Futures)



•   Heighten visibility of Singapore listed companies



•   Increased trading activities and promote a more vibrant marketplace.
Roles & Responsibilities
                  FTSE                         SPH                    SGX

Brand   Internationally recognized    The “STI” is a brand     Asia’s gateway
Value   brand name and index          name with strong
        methodology                   following in Asia


Role    • Create, maintain &         • Marketing & Publicity   • Marketing &
          disseminate FTSE ST                                    Publicity
          indexes
                                                               • Encourage
                                                                 development of
                                                                 more index
                                                                 linked products
The revamped STI and 18 new FTSE ST indices

5 Benchmark Indices       10 Sector Indices
                          FTSE ST Oil & Gas Index
STI (revamped)
                          FTSE ST Basic Materials Index
                          FTSE ST Industrials Index
FTSE ST Mid-Cap Index     FTSE ST Consumer Goods Index
FTSE ST Small-Cap Index   FTSE ST Healthcare Index
FTSE ST All-Share Index   FTSE ST Consumer Services Index
                          FTSE ST Telecommunications Index
FTSE ST Fledging Index
                          FTSE ST Utilities Index
                          FTSE ST Financials Index
1 Theme Index             FTSE ST Technology Index
FTSE ST China Index
                          3 Sub-sector Indices
                          FTSE ST Real Estate Index
                          FTSE ST Real Estate Holding & Development
                          FTSE ST REIT
The Straits Times Index (STI)
Ignatius Low
Straits Times Money Editor,
Singapore Press Holdings

5th June, 2007
                Why the Collaboration?
•   To ensure STI’s continued position as the benchmark index of the
    Singapore stock market

•   Adopt a global methodology to facilitate creation of STI-linked
    financial products

•   Complement STI with a comprehensive suite of indices that tracks
    performance of various sectors of the Singapore stock market

•   A decision was taken to work with SGX to utilise its local market
    expertise and with FTSE for its global outreach
Introducing the Straits Times Index (STI)…
•   Launched by The Straits Times in 1966 and maintained by Singapore
    Press Holdings Limited since

•   The key barometer of the Singapore stock market for the past 40
    years

•   Primary objective is to track trading activity of stocks on the Singapore
    Stock Exchange

•   50 constituents – accounts for 51% of average daily traded value and
    64% of total market capitalisation

•   Index components reviewed on a half-yearly basis
             About STI’s Background…
•   Previously known as the Straits Times Industrials Index, STII, as it
    only included stocks in the Industrials category

•   Revamped in 1998 with the following changes:
    1) covered all major sectors, not just industrials; coincided with major
    sectoral re-classification of SGX stocks
    2) switched from price-weighted to value-weighted index

•   Smooth transition from old STII to revamped STI

•   Revamped STI was constructed by SPH in consultation with SGX and
    an external consultant

•   Reviewed at least once a year and ad-hoc when necessary
                The Revamped STI …
•   Remains as Singapore’s benchmark index

•   Positioned as Singapore’s blue-chip index, comprising the
    market’s top 30 stocks based on free float adjusted market
    capitalisation

•   Free-float adjusted and screened for liquidity using FTSE’s
    internationally recognised methodology.

•   No significant change to representativeness of the index – last
    20 stocks in the current index account for only 10% of the
    index by market capitalisation
The 18 New FTSE ST Indices
Donald Keith
Deputy Chief Executive Officer
FTSE Group

5th June, 2007
FTSE Group
•   Independent company
    • FTSE was established as a joint venture between the Financial Times
      and the London Stock Exchange
    • FTSE’s sole business is the creation and management of indices and
      associated data services
•   An equity index market leader with breadth and depth
    • FTSE calculates over 100,000 stock market indices daily, including
      more than 600 real time indices
    • 98% coverage of the world’s equity market capitalisation
•   Global client base
    • FTSE serves clients in 77 countries including: Barclays Global Investors,
      CalPERS, Fidelity, Goldman Sachs, Hong Kong MPF, Merrill Lynch,
      Nomura Asset Management, PGGM
    • Over $2.5 trillion in assets are benchmarked to FTSE
What Will FTSE Bring to the
Partnership?
FTSE’s internationally renowned index design methodology will be
applied to the Singapore Market

FTSE’s cutting edge free float         Indices are more investable and
weighting and liquidity screening      easy to trade

Clear and transparent structure with
                                       Indices easy to anticipate and
predictable rules-driven index
                                       track
management

The adoption of the globally
                                       Facilitates cross-border analysis
recognised Industry Classification
                                       and comparisons
Benchmark (ICB) system
 Current ST                                New FTSE ST
Index Family                               Index Family

                                                                  FTSE ST
                              Straits                              China
                                                           13
                           Times Index                             Index
 Straits          7                                     FTSE ST
                             (30 Stocks)      FTSE ST All-Share
 Times        All-Share
 Index         Sector                         All-Share
                                                         Sector
(50 Stocks)    Indices                          Index
                                               (98% of  Indices
                                                SGX
                            FTSE ST             Main
                          Mid Cap Index        Board)



                             FTSE ST
                          Small Cap Index

                              FTSE ST
                          Fledgling Index
  Clear, Concise & Transparent
  Methodology                  Free Float is the     Indices should be
                              share capital of a     investable. Each
                               company that is       constituent must
                             freely available for   pass a liquidity test
                            trading by investors



    SGX          Filter          Investable          Investable              Investable
 Main Board                       Universe            Universe                 Index




                By Market     Screened for            Liquidity             Free Float
All Companies
                   Cap         Free Float              Tested               Weighted
Index Features
• Eligible Companies
    • Companies must have a full listing on the SGX Main Board
    • All classes of the ordinary shares in issue
    • Companies are subject to conforming to FTSE’s free float, liquidity
      rules and size criteria
• The FTSE ST Index Series will be reviewed on a semi-annual
  basis in March and September
• At review the index methodology provides stability and reduces
  turnover in the selection of index constituents
• The indices are managed according to a transparent and public
  set of index rules and also overseen by an independent
  committee, to ensure that the rules are correctly applied and
  adhered to
• Capital and total return indices are available
Index Overview
Index                     Overview

                          Top 30 companies of the SGX Main Board universe ranked by full
Straits Times Index
                          market capitalisation that pass the relevant investability screens

                          The next 50 companies by full market capitalisation of the SGX Main
FTSE ST Mid Cap Index     Board universe which are not large enough to be constituents of the
                          STI, and that pass the relevant investability screens
                          Companies within the top 98% by full market capitalisation of the SGX
FTSE ST Small Cap Index   Main Board which are not large enough to be constituents of the STI
                          and FTSE ST Mid Cap Index, and pass the relevant investability screens

                          All companies within the top 98% by full market capitalisation of the
FTSE ST All-Share Index
                          SGX Main Board that pass the relevant investability screens

                          The remaining 2% of the companies of the SGX Main Board that are
FTSE ST Fledgling Index   too small to be included in the FTSE ST All-Share Index. These
                          companies will be free float adjusted but not screened for liquidity

                          A China-play index including Chinese companies that are members
FTSE ST China Index
                          FTSE ST All-Share Index
    New Sector Indices
                                             FTSE-ST All-Share Sector Indices
•    The FTSE ST All-Share Index will be
                                             FTSE ST Oil & Gas Sector Index
     divided into 13 new sector indices to
                                             FTSE ST Basic Materials Sector Index
     provide additional granularity for
     investors                               FTSE ST Industrials Sector Index
                                             FTSE ST Consumer Goods Sector Index
•    Based on internationally recognised
     “Industry Classification Benchmark”     FTSE ST Healthcare Sector Index
     (ICB)                                   FTSE ST Consumer Services Sector Index

•    ICB was created in partnership by       FTSE ST Telecommunications Sector Index
     Dow Jones Indexes and FTSE Group        FTSE ST Utilities Index
•    Global presence – ICB is adopted by     FTSE ST Financials Sector Index
     stock exchanges representing over       FTSE ST Technology Sector Index
     65% of the world’s market               FTSE ST Real Estate Index
     capitalization                          FTSE ST Real Estate Holding And
                                             Development
                                             FTSE ST Real Estate Investment Trusts
Summary
•   The new family of indices will be used as the basis for trading
    and benchmarking of financial products, such as institutional
    and retail funds, exchange traded funds, derivatives contracts,
    and other financial products
•   The new indices will allow investors to measure and invest in
    the major capital segments of the Singapore market for the first
    time and facilitate cross-border analysis and comparisons
•   The adoption of FTSE’s market-leading international index
    methodology will make the indices more investable and easy to
    trade
•   The indices will be used to promote and attract international
    listings on markets operated by SGX-ST and its related
    corporations
Rollout Timeline
                              Revamped STI and current STI indices run in parallel

                                         18 other FTSE ST indices values available



5 June 07            Sep 07                 Oct 07                          By Dec 07

 Issue of Press    Revamped STI                18 FTSE ST                  Switchover
 Release / Press   value available            indices values               to 19 new
 Conference on     on FTSE & SPH               available on                  indices
 Revamped STI /       websites                 FTSE & SPH
  New FTSE ST                                    Websites
     Indices
           Thank You

      For more information:

  www.straitstimes.com/stindex
www.ftse.com/ftse_st_index_series

				
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