The STI was first introduced on 31 August 1966 with a base value of 100. Over the years, the index has evolved to include various companies from different sectors, reflecting the changing landscape of the Singapore economy. The STI is calculated using a free float market capitalization-weighted methodology, which means that larger and more actively traded companies have a greater impact on the index's movements.
The constituents of the STI are reviewed periodically based on specific criteria such as market capitalization, trading liquidity, and sector representation. Some of the prominent companies that have been part of the STI include DBS Group Holdings, Singapore Telecommunications, Oversea-Chinese Banking Corporation, and Keppel Corporation. These companies represent a diverse range of industries such as banking and finance, telecommunications, real estate, and manufacturing.
As of the latest available information, the constituents of the STI include companies such as Jardine Matheson Holdings, United Overseas Bank, CapitaLand, and Singapore Airlines. The list is subject to periodic changes as companies' market capitalizations and trading volumes fluctuate.
Investors and market participants closely monitor the STI as it provides an indication of the overall performance of the Singapore stock market. The index is used as a benchmark for fund managers, and financial products such as exchange-traded funds (ETFs) are designed to track its performance.
Comparison to other major indices:
1. S&P 500 (United States): The S&P 500 is widely regarded as a benchmark for the U.S. stock market. It represents the performance of 500 large-cap U.S. companies. Historically, the S&P 500 has outperformed the STI in terms of overall returns due to the size and global dominance of the U.S. economy. However, the STI has its own strengths and offers exposure to the unique opportunities in the Singapore market.
2. FTSE 100 (United Kingdom): The FTSE 100 represents the performance of the 100 largest companies listed on the London Stock Exchange. The STI has shown comparable performance to the FTSE 100, and both indices have faced similar challenges such as economic uncertainties and market volatility.
3. Nikkei 225 (Japan): The Nikkei 225 is a prominent index in Japan, representing the performance of 225 large-cap Japanese companies. The STI has demonstrated relative strength compared to the Nikkei 225 in certain periods, reflecting Singapore's position as a regional financial hub and its robust economic growth.
4. Hang Seng Index (Hong Kong): The Hang Seng Index is a key benchmark for the Hong Kong stock market. While both the STI and Hang Seng Index are influenced by regional economic trends and trade dynamics, they may show divergent performance due to variations in industry composition and company-specific factors.
It is important to note that the performance of indices can be influenced by a multitude of factors, including economic conditions, geopolitical events, and sector-specific dynamics. Investors should consider their own investment goals, risk tolerance, and diversification strategies when comparing the STI to other major indices.
Disclaimer: The information provided here is for educational and informational purposes only and should not be construed as financial or investment advice. The constituents of the STI may change over time, and it is recommended to refer to the official sources or the Singapore Exchange for the most up-to-date information.
