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The Singapore Exchange Ltd (SGX), Singapore Press Holdings Group (SPH) and the FTSE Group (FTSE) today signed a memorandum of understanding (MOU) to create a comprehensive suite of equity indices for the Singapore market.
Under the MOU, the three parties will review and re-launch the Straits Times Index (STI) and also explore and introduce additional indices, so that a complete index family will be created.
While the STI will remain the main benchmark index, it will be augmented with a new set of local and regional indices covering a wider range of the investable opportunity set. The expanded series will be used for the trading and benchmarking of financial products such as institutional and retail funds, exchange traded funds (ETFs), derivatives contracts and such other products as identified by the parties. The indices will be designed using FTSE’s international methodology standards, will be free-float adjusted and will be based on the Industry Classification Benchmark (ICB).
The parties intend to enter into a cooperation agreement to operate the STI and the new indices on a commercial basis and to promote and license data and financial products based on the new index family.
Mr Donald Keith, Deputy Chief Executive of FTSE Group, said: “FTSE is honoured to be the strategic index partner of SGX and SPH. This MOU represents the latest in our network of cooperative ventures with exchanges in Asia. We are committed to developing a viable family of indices, using our long standing expertise in international indexing, to further boost Singapore’s standing among international financial index investors.”
Mr Hsieh Fu Hua, Chief Executive of SGX, said: "This strategic collaboration will facilitate analysis and comparison of SGX-listed companies with those of other markets. It will enable international investors to make better informed decisions on our market."
Mr Alan Chan, Chief Executive Officer of SPH, said: “The Straits Times Index has been the main barometer of the SGX for the past 40 years. We are pleased to partner both SGX and FTSE to review and re-launch the STI as part of a wider plan to develop a new family of indices to complement the STI.”
The parties envisage that the redesigned STI and other indices in the new family will be available before the end of 2007,
