Singapore launches new index for regional stocks<\/p>\n
SINGAPORE (Reuter): Singapore launched a new regional share
\nindex yesterday in an effort to boost its position as one of
\nAsia's top equity trading centers.<\/p>\n
Announcing the new index, Finance Minister Richard Hu said the
\nStock Exchange of Singapore (SES) had recently attracted a large
\nnumber of foreign companies, which now represented about 25
\npercent of the market's total capitalization.<\/p>\n
He said the Business Times Singapore Regional Index (SRI),
\nwhich has 38 component stocks ranging from shipyards and
\nelectronics firms to finance and telecommunications companies,
\nwould be a clear benchmark to measure the performance of Asian
\nregional investment portfolios.<\/p>\n
\"This reflects the increasing international dimension of the
\nSingapore stock market,\" Hu told a ceremony to launch the index.<\/p>\n
Hu said the combined market capitalization of the five
\nSoutheast Asian stock markets of Indonesia, Malaysia, Thailand,
\nthe Philippines and Singapore had risen from about 40 percent of
\ngross domestic product (GDP) in 1990 to 120 percent last year.<\/p>\n
Gains in the respective price indices of the exchanges have
\nalso exceeded 50 percent in most cases.<\/p>\n
Hu said the Singapore government would also introduce a range
\nof other measures to help promote Singapore as a center for
\ninternational securities trading and investment management.<\/p>\n
With immediate effect, foreign companies meeting certain
\ncriteria could apply to the Monetary Authority of Singapore to
\nconvert or list their shares in Singapore dollars, he said.<\/p>\n
The criteria included having more than 35 percent of revenue,
\nprofits or expenses attributable to Singapore operations, and
\nhaving senior managers responsible for the business located in
\nSingapore.<\/p>\n
Hu also said the SES was reviewing the structure of the local
\nstock options market to open participation in it to firms that
\nwere not members of the SES, and was working with banks to allow
\nquotation of unit trusts.<\/p>\n
The SES said in a statement the new regional share index would
\nbe weighted by market capitalization and would only include large
\nfirms with a high exposure to regional markets.<\/p>\n
Of the 38 SRI stocks, 24 are quoted in Singapore dollars and
\n14 in U.S. dollars. Seven of the components are the foreign
\ntranches of Singapore companies which have both local and foreign
\ntranche listings.<\/p>\n
Hu said the Singapore International Monetary Exchange (SIMEX)
\nwould study the index's performance to evaluate the feasibility
\nof introducing a futures contract based on it.<\/p>\n
He said six Singapore banks would jointly sponsor a unit trust
\nto invest exclusively in the SRI component stocks.<\/p>\n
Analysts said the package of measures would help boost trading
\nin the shares of foreign firms listed in Singapore.<\/p>\n
They said the new index should help companies such as Hong
\nKong-based conglomerate Jardine Matheson which had not been
\nincluded in a major stock index since it switched its primary
\nlisting to Singapore from Hong Kong two years ago.<\/p>\n
\"It offers companies which are currently not on any index an
\nexposure. That's important,\" said Michael Tan, research manager
\nat local brokerage Lee & Co.<\/p>\n
Inder Bethal Singh Thakral, managing director of electronic
\ngoods distributor Thakral Corp Ltd, which is one of the new SRI
\ncomponents, said he thought his company would benefit from being
\nincluded in the new index.<\/p>\n
\"The investor public will get more chance to look at it now
\nand look at it more from a regional perspective,\" he said.<\/p>\n
Thailand, Indonesia<\/p>\n
Meanwhile, Morgan Stanley Capital International said in a
\nstatement that its Capital International Perspective SA is to
\ndevelop Free Indices for Thailand and Indonesian stock markets.<\/p>\n
\"The existing MSCI Thailand and MSCI Indonesia indices are
\ncalculated using local prices. However, for many securities these
\nprices do not reflect the real conditions prevailing for
\ninternational investors who must buy on the Foreign Board once
\nthe maximum foreign ownership ceiling has been reached,\" MSCI
\nsaid.<\/p>\n
The foreign board demands premiums over the local stock.<\/p>\n
The MSCI indices are used by fund managers to allocate assets
\nand track performance.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/singapore-launches-new-index-for-regional-stocks-1447893297",
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