5 Fascinating Things Investors Should Know About The 50-Year Old Straits Times Index
Blue chips, or stocks which make up the Straits Times Index (SGX: ^STI), tend to be a favorite among Singapore investors.
A recent report from bourse operator Singapore Exchange traced the history of the Straits Times Index since 2002. A 14 May 2017 article from The Straits Times was even better – it went back decades to 1966, right to the index’s roots.
The Straits Times Index was founded before the Stock Exchange of Singapore (SES) and has a history almost as storied as Singapore itself. Here’re five fascinating things that investors may want to know:
1. The Straits Times Index started life as the Straits Times Industrials Ordinary Share Index (STII). The STII officially started from a base price of 100 on 30 December 1966 and had 29 component stocks.
2. The Straits Times Index, as we know it, started taking shape on 28 August 1998. The STII bowed out at 885.26 points in place of the Straits Times Index which consisted of 55 constituents back then.
3. Like the Dow Jones Industrial Average in the US, the STII was weighted based on its components’ stock prices. The Straits Times Index, however, is weighted based on the market capitalisation of its stocks, which made it less susceptible to manipulation.
4. On 10 January 2008, the Straits Times Index was whittled down to 30 companies, down from the 47 component stocks just prior to the change. This is the Straits Times Index that we have come to know today.
5. The oldest company in today’s Straits Times Index is Jardine Matheson Holdings Limited (SGX: J36), which was founded in the 1880s. Interestingly, Jardine Matheson Holdings is also the “youngest” of the group – that is, it is the latest company to be added to the Straits Times Index. The conglomerate re-joined the Straits Times Index on 19 September 2016 after leaving it in September 2015.