Mapletree Industrial Trust will replace media company Singapore Press Holdings on the Straits Times Index from June 22.

SINGAPORE — The replacement of Singapore Press Holdings (SPH) with Mapletree Industrial Trust on the Straits Times Index (STI) underlines how the Singapore stock market is very much yield-driven, a reflection of investor sentiment here, said analysts.

Analysts said the benchmark index for the stock market here is made up of more traditional companies, in contrast with other indices like the Nasdaq or S&P 500 in the United States, which have more technology or new-economy companies, known as growth stocks, as its constituents.

While this may appeal to investors here, analysts said it also means that the market here is less diversified.

Stocks which pay out dividends, such as real estatement investment trusts (Reits), dominate the STI and they have outperformed other asset classes on the index, including SPH and also telco stocks.

Other dividend-heavy counters include the three local banks, as well as telco Singtel, said Mr Terence Wong, founder of Azure Capital.

On Thursday (June 5), FTSE Russell, the administrator of the benchmark index of the Singapore stock market, announced that Mapletree Industrial Trust will replace media company SPH on the STI from June 22, becoming the sixth Reit to become a component stock.

Analysts said this will be the first time SPH, which has been a component stock of the STI since it started trading in 1998, is removed from the index.

The STI tracks 30 of the largest companies listed on the Singapore Exchange’s mainboard, ranked by market capitalisation.

The replacement of SPH came about after the quarterly June review, where index administrators will rank eligible listed companies according to their market capitalisation and see how much they have dropped or increased before deciding whether a change is necessary.

Full story at https://www.todayonline.com/singapore/sphs-replacement-reit-shows-how-yield-driven-spore-stock-market-say-analysts