The closely watched barometer of Singapore's stock market, the Straits Times Index (STI), is about to get a significant makeover with the addition of three new counters.

The move - already praised by analysts - will answer longstanding calls to make the index of 30 Singapore-listed blue chip stocks a better gauge of market action here.

From Sept 21, in the wake of a twice-yearly review, the new STI will include property giant UOL Group, Chinese shipbuilder Yangzijiang Shipbuilding Holdings and airport ground-handler and food solutions provider Sats. They will replace Jardine Matheson Holdings, Jardine Strategic Holdings and commodities trader Olam International.

The move comes as new liquidity rules kick in, requiring STI constituents to boast higher trading levels.

Investors and market watchers have long questioned the place of the tightly held Jardine stocks in the STI given their thin trading volumes, which hardly reflect broader market sentiment.

Jardine Matheson and Jardine Strategic have long been part of the STI but their daily trading volumes rarely hit one million shares.

Analysts have given the new STI line-up the thumbs-up, noting that it will reflect more freely traded stocks and so, more accurately represent market conditions here.

The index, traditionally driven by stocks in property and finance, will reflect a more diverse mix of sectors as well, especially with the addition of industrials Yangzijiang and Sats.

All this could make room for even more investment products linked to the STI, such as exchange-traded funds - affordable investment products whose values rise and fall with STI movements.

Index trackers have already begun accumulating stocks of the three entrant companies, spurring an upswing in their prices. This gives investors something to cheer about amid the talk of gloom and doom pervading the market.