FTSE STI Index review / Thai Bev

FTSE STI Index review / Thai Bev: Thai Bev will replace IHH as a constituent of the STI at the Mar half-yearly review. This will take effect at the close of 15 Mar. KELive and CLSA had previously mooted the idea of Thai Bev joining the STI, possibly during the Sep ’13 review, hence the timing of Thai Bev’s entry is earlier than anticipated. Expect Thai Bev shares to see significant fund inflows, given the propensity for funds within the industry to “hug the index”. Thai Bev starts off from a low institutional ownership base. Moreover, expect a number of funds to be flush with cash from divestment of their stake in FNN, and eager to find a substitute investment for Asian consumer exposure. These factors may result in sporadic share demand-supply imbalance, and we do not rule out possible upside volatility in Thai Bev stock in the lead up to the STI constituent change. HPH Trust, Keppel Land, A-Reit, CCT, UOL remain on the reserve list.