Shares of new STI component stocks UOL, Yangzijiang Shipbuilding and Sats surge

SINGAPORE - Shares of property giant UOL Group, shipbuilder Yangzijiang Shipbuilding Holdings and engineering firm Sats surged on Friday (Sept 4) on news that they will replace two Jardine companies and Olam International as constituents of the Straits Times Index (STI).

The change, which comes after an semi-annual review, will take effect from Sept 21.

As at 11.45 am, shares of UOL jumped nearly 1 per cent or six cents to $6.11, while SATS shares jumped 5.4 per cent or 19 cents to $3.71. Yangzijiang rose 2.4 per cent or 2.5 cents to $1.085.

The Straits Times Index was trading down about 1.4 per cent.

Shares of Jardine Matheson fell nearly 2 per cent or US$1 to $49.32, Jardine Strategic lost 0.6 per cent or 18 US cents to US$28.27, while Olam slipped 1.7 per cent or 3.5 cents to $1.995.

The changes were prompted by new rules that require shares on the STI to have a reasonably high level of turnover or liquidity.

RHB in a note on Friday that it expects the STI to see an "increase in weightage in terms of Financials with the addition of UOL (to 57 per cent from 51 per cent) and Industrials (to 15 per cent from 6 per cent with Yangzijiang and SATS)."

"Consumer goods weightage changes very modestly (still minus 6 per cent) as Olam is the fifth smallest market cap counter on STI," RHB said.

The STI reserve list, comprising the five highest ranking non-constituents of the STI by market capitalisation, will be (in order of size) CapitaLand Commercial Trust, Singapore Post, Suntec Reit, Keppel Reit and M1.

Companies on the reserve list will replace any constituents that become ineligible as a result of corporate actions, before the next review.