In the first edition of our 4 Stocks Now column in 2021, we zoom in to the new companies that have been added into Singapore's benchmark Straits Times Index (STI) in the past two years.
When we invest in the STI, we're gaining exposure to a diverse and strong group of companies – or more commonly termed the 30 largest and most liquid companies – listed on the Singapore Exchange (SGX).
Often, this is part of a passive investing strategy and also to achieve market returns. While investors may take a hands-off approach and just let their investments grow over a long horizon, the STI itself is regularly reviewed and updated if there is a need.
Precisely four new companies have been added into the STI since 2021, and here are how they have performed.
Mapletree Logistics Trust (SGX: M44U)
MLT was the most recent addition to the STI on 23 December 2021 with an approximate weightage of 1.6%. This also made it the second Mapletree REIT – after Mapletree Commercial Trust – and also the fifth REIT to be part of the STI. As a whole, REITs now comprise close to 10% weightage from the STI.
With the addition of MLT, Golden-Agri Resources had to make way around the STI.
MLT has a market capitalisation of more than $6.6 billion and achieved a total return of 45% in 2021. Since being listed on the STI on 23 December 2021, its stock price has already risen close to 1.8% to $1.73. At its current share price, MLT pays out a distribution yield of over 3.7%.
Mapletree Commercial Trust (SGX: N2IU)
MCT, the first of the two Mapletree REITs on the STI today, was added like a constituent recently as well, on 23 September 2021. MCT replaced Hutchison Port Holdings Trust on the STI.
With a market capitalisation of over $7.5 billion, MCT achieved an overall total return of over 52% in 2021. Since its addition into the STI, its share price has risen 5.3% to $2.39. At its current stock price, it is paying a distribution yield of 4.0%.
Read Also: 10 Companies That Beat Singapore's Benchmark Straits Times Index (STI) In 2021
Dairy Farm International (SGX: D01)
Dairy Farm was included in the STI on 24 September 2021. As you can tell, there was a one-year period after its addition before another constituent was put into the STI. Dairy Farm took the area of StarHub on the STI.
Dairy Farm is part of the Jardine Matheson Group, which is also another constituent of the STI, and three other associated companies around the STI, including Jardine Strategic Holdings, Jardine C&C and HongKongLand.
Listed in US Dollars at a market capitalisation of over US$7.7 billion ($10.4 billion), Dairy Farm also withstood a turbulent year with a total return of -34% in 2021. Since being put into the STI on 24 September 2021, its stock price has plunged nearly 58% to US$5.75. At its current share price, it pays a dividend yield of 3.7%.
Venture Corporation (SGX: V03)
Venture was inserted in to the STI on 5 January 2021. Its addition was slightly dissimilar to the other additions, as it replaced the delisted Global Logistics Properties (GLP).
Venture includes a market capitalisation of $4.7 billion and it has seen a 23% rebound in its share price in 2021. This occurs the heels of a nearly 35% decline in stock price since it was featured on STI. At its current share price of $16.34, it is paying a dividend yield of near to 4.3%.
