"While institutional investors have traditionally been focused on MSCI Singapore & STI constituents given size and liquidity requirements, this move to devise a new index could potentially allow additional inflow and reallocation into small & mid cap names within the market," states Pineda in a Sept 19 note, ahead of the official launch of the indices on Sept 22.
Arthur Pineda of Citi Research warns that the Straits Times Index (STI), which has gained more than 13% year to date to record levels, may lag relative to the small- and mid-caps as funds now invested in the STI counters could potentially be rotated.
SGX, as part of its broader bid to promote the non-STI universe of stocks that had been less traded, has introduced the iEdge Singapore Next 50 Indices, where the component stocks are the "next 50" stocks measured by market value.
