Dig deeper, however, and the revamp in January next year promises to be non-disruptive, with little immediate impact on the prices of the counters involved, according to market experts.

Today, a test version of the new-look STI will start running on the FTSE Group's website. It will begin from a trial value of 1,000 points to avoid confusion with the current index.

The transition will be seamless come January, as the slimmer STI will start from its predecessor's closing figure the day before the launch.

Will the new-look index differ significantly from the current one?

For a start, there will be minimal change in the combined market capitalisation of the current STI vis-a-vis the new STI - $435 billion versus $413 billion.

The percentage of total market capitalisation will also fall by six percentage points - from 62 per cent to 56 per cent post-change.

As The Straits Times' Money Desk editor Ignatius Low said at a media conference last Friday: 'We haven't really changed in terms of the representativeness of the index.'

For investors concerned about the comparability between the current and new indexes, there is a strong correlation between the two.

Regressions show that the new STI tracks the current one with a 99 per cent accuracy over the past one, three and five years.

It also tracks the STI with an accuracy of 98 per cent over the last eight years.

Commenting on the new component stocks and those that were dropped, CIMB-GK research head Song Seng Wun said: 'There were no surprises. Most of the market players would have seen this coming.'

The market should have already factored in the effect, if any, analysts note.

Last month, a Credit Suisse report forecast that 'the share price impact for the excluded stocks is unlikely to be significant'.

The report also accurately identified three of the four new entrants, while getting right 16 out of the 22 stocks that were eventually dropped.

So, when the local bourse reopens today, a selling frenzy is unlikely to hit stocks that have been excluded.

Said a dealer: 'I don't think investors will rush for the exit just because a stock is dropped from the STI, especially if it still yields healthy dividends and has strong growth prospects.'

However, the four new entrants could see a fresh wave of institutional interest as early as today.

They are aircraft maintenance firm SIA Engineering, agri-business group Wilmar and two China-based firms - shipbuilder Yangzijiang and high-end real estate developer Yanlord.

In particular, the share prices of Wilmar and Yangzijiang have been flying high recently.

Wilmar closed at an all-time high of $3.84 last Friday, having seen its price more than treble in the past year.

Likewise, Yangzijiang has been a prime beneficiary of the strong interest in China plays recently and has seen its price surge from its initial public offer of 95 cents in April to its closing value of $2.43 last week.

alfoo@sph.com.sg