Value of SGX firms at record year-end high

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#1
When I read such news, I can't help but wonder if this is a good thing? Huh

Jan 1, 2011
Value of SGX firms at record year-end high

Total value of listed firms on local bourse surpasses 2007 peak
By Jonathan Kwok

THE total value of all companies listed on the Singapore Exchange (SGX) is at a record end-of-year high thanks to the strongly recovering market and economy.

At the closing bell yesterday at noon, an early finish ahead of New Year, the value of SGX listed companies had eclipsed the previous record Dec 31 high back in 2007, prior to the financial crisis.

The market value, also known as the market capitalisation, of all SGX firms at yesterday's close was $846.1 billion. This beat the $797.8 billion on Dec 31, 2007, at the end of the previous boom before the recession battered the market.

The market capitalisation of a firm is calculated by multiplying the current share price by the total number of shares.

Observers regard the new record as testament to the stock market's health and and a reflection of how far the recovery has come since grim periods of 2008 and 2009 when the crisis was at its darkest.

The record figure was aided by the extra corporate activity spurred by the rebound including new listings on SGX and the sale of new shares to existing shareholders, known as rights issues.

The market's total value of $846.1 billion is also 23 per cent higher than 2009's $689.8 billion. Shares enjoyed a mostly uninterrupted rise throughout 2010.

Still there was a blip around mid-year as the debt woes of euro zone countries raised questions about whether the global economy would slip back into recession.

The benchmark Straits Times Index (STI) closed at 3,190.04 points yesterday, a gain of 10.1 per cent on the year.

Nomura's South-east Asia head of equity research, Mr Lim Jit Soon, says the 30 STI component stocks made up a large majority of the entire bourse's market value. Rises in these blue chips had contributed significantly to the record high.

The market was helped substantially by the listing of British insurance giant Prudential in May, as well as October's listing of Global Logistic Properties (GLP) and Mapletree Industrial Trust (MIT). Yesterday's figures show Prudential added $33.7 billion to Singapore's market cap, while GLP added $9.7 billion and MIT contributed $1.6 billion.

The top blue-chip performer for the year was Genting Singapore, whose market value surged 76 per cent to $26.7 billion as its share price jumped. The casino operator's integrated resort, Resorts World Sentosa, has surpassed even the most optimistic expectations, spurring upgrades from market analysts and ramped-up investor interest. This helped Genting jump two places to No. 9 in the league of the bourse's largest companies.

SingTel is still the bourse's largest company, with a market value of $48.6 billion down 2 per cent from 2009 after SingTel's price dipped slightly over the year.

In the No. 2 spot was Jardine Strategic Holdings, then sister stock Jardine Matheson. They are trading near all-time highs.

The Jardine stocks overtook palm oil giant Wilmar International, which lost 12 per cent in market value to $36 billion. Its share price has dipped in the past two months after a large drop in third quarter profits and after investors reacted coolly to its forays into the property business.

DBS Group Holdings and United Overseas Bank also fell in value. But OCBC Bank gained 12 per cent to $33 billion.

Sias Research vice-president Roger Tan said the bourse's market value will grow further this year, with potential new listings and funds flowing here from developed countries. He also expects local investors to jump into the market in greater numbers as inflation rises.

jonkwok@sph.com.sg
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#2
""The market value, also known as the market capitalisation, of all SGX firms at yesterday's close was $846.1 billion. This beat the $797.8 billion on Dec 31, 2007, at the end of the previous boom before the recession battered the market.""

does anyone has idea though in terms of market capitalisation, we are at all-time high..however the current STI-index still has some hundreds of points to climb before its all-time high record..why is there a difference?
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#3
(01-01-2011, 10:56 AM)pianist Wrote: ""The market value, also known as the market capitalisation, of all SGX firms at yesterday's close was $846.1 billion. This beat the $797.8 billion on Dec 31, 2007, at the end of the previous boom before the recession battered the market.""

does anyone has idea though in terms of market capitalisation, we are at all-time high..however the current STI-index still has some hundreds of points to climb before its all-time high record..why is there a difference?

Change in components of the STI over the last 3 years.
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#4
(01-01-2011, 10:56 AM)pianist Wrote: does anyone has idea though in terms of market capitalisation, we are at all-time high..however the current STI-index still has some hundreds of points to climb before its all-time high record..why is there a difference?

the STI-index comprises a defined basket of stocks. Simple reason would be that some of the larger caps are not part of the STI.
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#5
(01-01-2011, 11:29 AM)mikh Wrote:
(01-01-2011, 10:56 AM)pianist Wrote: does anyone has idea though in terms of market capitalisation, we are at all-time high..however the current STI-index still has some hundreds of points to climb before its all-time high record..why is there a difference?
the STI-index comprises a defined basket of stocks. Simple reason would be that some of the larger caps are not part of the STI.
so it would seem more accurate to gauge the market using market capitalisation than the sti index?
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#6
Not forgetting that there were a few mega IPO like GLP, CMA, MIT, etc this year.
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#7
(01-01-2011, 03:25 PM)egghead Wrote: Not forgetting that there were a few mega IPO like GLP, CMA, MIT, etc this year.
i wonder if there were mega ipos in 2007 as well? hmm if that is the case, then using market capitalisation might not be a good guage.
anyone owns those stocks mentioned in the list today?

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#8
If you are interested in the original STI back during 2007.........

You can construct your own using chartnexus..........You must enter the stock and weightage though

Not sure how SGX calculate the weightage, if they alter it everyday then it's v.tedious.......

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#9
What I meant was that 2010 market cap was higher than 2009 partly due to the few mega IPO. The total market cap is likely lower than 2007 if we remove their contribution?
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#10
Quote:so it would seem more accurate to gauge the market using market capitalisation than the sti index?

depends on what you mean by "gauge the market".
Is there more money in the market? Yes
Are we comparing apple to apple? No, because stocks like the mega caps were not available in the past
Are the top 30 companies as listed in the FTSE STI worth more in 2010 than 2007? I don’t think so

* the index itself had a major overhaul circa 2008. In pre-2007 we used to have the STII which has now been re-constituted into the FTSE STI. The components on FTSE STI also gets updated periodically.

All about the FTSE STI
http://www.straitstimes.com/FTSE%2BST%2B...dices.html

(01-01-2011, 04:10 PM)newborn1000 Wrote: Not sure how SGX calculate the weightage, if they alter it everyday then it's v.tedious.......

FTSE STI Ground Rules
http://www.ftse.com/Indices/FTSE_ST_Inde...s_v1.8.pdf

Section 6 and 8 implies that component weightage is based on prices of the pre-determined number of shares rather than total value of the counter
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