Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
In total, 18 new indices will be introduced into the Singapore market, which will be developed in tandem by Singapore Press Holdings (SPH), Singapore Exchange (SGX) and the FTSE Group, which have signed a cooperation agreement to construct and manage the new family.
On the surface, the changes to the STI will not affect its status as one of AsiaÆs main benchmarks. Foremost, the biggest difference between the old and new STI will be the number of constituent stocks, which will be reduced from 50 to 30. According to SGX, the reduction in constituent stocks in the index will not significantly change the sectoral representation of the STI, especially since it is value-weighted.
Additionally, SingaporeÆs benchmark index will now be calculated by FTSE for liquidity criteria and free-float adjustment purposes. Previously, this function was done in-house by SGX.
However, it is with the new indices where investors will likely see the greatest changes in the Singapore market. All 18 indices will track different sectors of the Singapore market and will be based on the International Classification Benchmark (ICB), which is a hybrid of FTSE and Dow JonesÆ individual classification systems and will help facilitate cross-border analysis and comparisons.
Among the 18 new indices, four will be classified by the consortium as ST benchmark indexes. These will comprise of the FTSE ST Mid Cap Index and the FTSE Small Cap Index. The FTSE ST All Share Index will comprise of all companies within the top 98% by full market capitalisation of the entire main board, while the FTSE ST Fledgling Index, will consist of companies that are too small to be included within the All Share Index.
The remaining 14 indices to be launched in Singapore will be sector and theme-based. There will be one theme based index, which will be China related, but the 13 sector indices will each track a unique part of SingaporeÆs economy. Within this new range of indices, sectors such as oil and gas, consumer goods and financials will be tracked.
The 18 new indices are slated to launch by the end of 2007 and will serve as the basis to introduce new index-linked investment products in Singapore. The new family of indices will also be used as the basis for trading and benchmarking of financial products, such as institutional and retail funds, exchange traded funds, derivatives contracts, and other financial products.
Regulators keep their eyes open on tightening insurance industry by introducing more detailed risk management requirements, which could bring pressure on smaller players.
China and India are more obvious choices for AustralianSuper to consider in Asia Pacific, but the super fund currently lacks the expertise and prefers to stick to the US and Europe.
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Investors are increasingly turning to private companies and private debt in their hunt for ESG alpha, but the age-old problem of transparency and due diligence remains