Strategy

Strategy: Jardine Matheson & Olam most at risk to be removed from STI
Following the release of tighter liquidity requirements for constituents on FSSTI, Maybank-KE sees Jardine Matheson (JM) & Olam most at risk of being removed in the Sep review.

In their places, the house believes UOL, CapitaLand Commercial Trust, Yangzijiang, Suntec REIT and SingPost could be considered for inclusion.

Additionally, with JM's massive 7.03% weighting on the index, any rejig may benefit the next larger constituents such as the banks and Singtel, provided the funds do not get allocated elsewhere.

Still, without major catalysts, Maybank-KE expects the market to trade sideways with a downward bias. Its end-2015 FSSTI target of 3,400, based on 14x P/E.