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Keppel DC REIT (SGX:AJBU) to replace CapitaLand Commercial Trust (CCT) in the Straits Times Index (STI)

Editorial Team
Editorial Team

Due to the acquisition of CapitaLand Commercial Trust (CCT) by CapitaLand Mall Trust (SGX:C38U). CCT will be removed from the index, at its last traded price on its last trading day (16 October 2020).

As such, Keppel DC REIT (SGX:AJBU) will replace CaptiaLand Commercial Trust (CCT) in the Straits Times Index (STI) as of 19 Oct 2020.

Keppel DC REIT will have an indicative index weight of 1.2%, which would bring the total market cap of REITs in the STI close to 14% once the CapitaLand Integrated Commercial Trust (CICT) amalgamation is completed.

According to FTSE Russell, a CMT Temporary Line will be added to the STI on the open of 19 October. It will be deleted once its shares are amalgamated with CMT at the close of the distribution ex-date.

Keppel DC REIT was top performing S-REIT in 2020 YTD

Keppel DC REIT debuted on SGX in 2014 as the first pure data centre REIT to list in Asia and remained till today as the only pure data centre S-REIT on SGX. It invests in a diversified portfolio of income-producing real estate assets which are used primarily for data centre purposes.

The REIT’s portfolio grew from 8 assets valued at $1.0 billion at IPO, to 18 assets across Asia Pacific and Europe valued at $2.8 billion as of 30 Jun 2020.

Keppel DC REIT, has been the top performing S-REIT in YTD 2020 till 14 Oct with 45.3% total returns, receiving net institutional inflows of S$46.4 million.

Updated STI Reserve List

With this change, the STI reserve list will now comprise of the following 4 stocks – Fraser Logistics & Commercial Trust (SGX:BUOU), Suntec REIT (SGX:T82U), NetLink NBN Trust (SGX:CJLU) and Keppel REIT (SGX:K71U), which are the four highest-ranking non-constituents of the STI by market capitalization. The STI Reserve List will be updated to five companies during the next STI Review in December.

Constituents of the STI are reviewed every quarter and a company in the reserve list may replace an existing company in the STI, as per the ground rules of the index.

FTSE is the benchmark administrator of the STI, which is the headline index of the FTSE ST Index Series, a family of indices created by Singapore Press Holding (SPH), Singapore Exchange (SGX) and the FTSE Group.

What is a stock market index?

A market index is a hypothetical portfolio of stocks that represents a segment of the financial markets. The calculation of the index value comes from the prices of the underlying holdings (the constituents). Most indices use weighting as a method of adjusting the individual impact of items in an index.

The FTSE ST methodology ensures the indexes accurately represent the investable universe for benchmarking purposes and can be easily replicated as the basis of index-linked products.

The Straits Times Index (STI)

The STI is made up of the top 30 stocks listed on SGC’s mainboard, ranked by market capitalization. Market capitalization refers to the total dollar market value of a company’s outstanding shares of stock and is calculated by multiplying the total number of a company’s outstanding shares by the current market price of one share.

Top 10 Constituents of the Straits Times Index with New Indicative Weight for 19 Oct (based on 30 Jun 2020 data)

STI StockStock CodeIndex Weight
(30 Jun 2020)
New Indicative Weight
(19 Oct 2020)
Sector / Industry
DBSD0515.21%15.1%Financial Services
OCBCO3912.66%12.5%Financial Services
UOBU1110.64%10.5%Financial Services
SingtelZ747.49%7.4%Telecommunications
Jardine
Matheson
J365.00%5.0%Industrials
Ascendas REITA17U3.82%3.8%REITs
Keppel
Corporation
BN43.50%3.5%Industrials
Wilmar
International
F343.27%3.2%Consumer
Non-cyclicals
CapitaLandC312.99%3.0%Real Estate (excl.
REITs)
SGXS682.80%2.8%Financial Services

Potential Sector Weightings of the STI (including Keppel DC REIT and CMT Temporary Line