(SINGAPORE) The days of dealers and remisiers using the Hang Seng Index as their main stock market barometer during daily trading will soon be over. By June 13 brokers who have been doing without real- time Straits Times Index (STI) data for the past four months will be given this data on their dealing terminals thanks to a deal just struck between the STI’s providers and the Securities Association of Singapore (SAS) announced yesterday.
A joint press statement issued by STI owners Singapore Press Holdings (SPH), Singapore Exchange (SGX), index providers FTSE and SAS which represents the interest of several houses, said: ‘SAS and the index partners – SPH, SGX and FTSE – have reached an agreement that paves the way for the real-time values of the STI and FTSE ST Index series to be sent to SAS members’ trading terminals and Internet trading accounts of their retail investors’.
This agreement ends a dispute that erupted in mid-January when the Straits Times Index was revamped and relaunched together with 18 sectoral indices that were jointly developed with index specialists FTSE, a series known as the FTSE ST indices.
The source of that dispute was payment of a US$6 fee per terminal per month. Prior to the revamp, brokers had been receiving STI data from their SGX feed but this was no longer possible because SGX is now revamping its system and has decided to cease maintenance of the STI.
Because an agreement could not be reached on payment of the terminal fee, dealing representatives in most local houses that fall under SAS’s purview were denied real-time STI data from January onwards.
As a result, many brokers reported that they turned to the real-time Hang Seng Index as their main daily trading indicator, thus raising the possibility that over time, the STI could lose relevance.
BT understands that the current arrangement calls for a waiver of the US$6 fee until 2012. BT also understands that in return, SAS broking firms have agreed to pay a licence fee of US$6,000 per year per firm to redistribute the STI and FTSE series data on their websites.
In the press statement yesterday SAS’s chief executive Lim Eng Hai said he is pleased that discussions with the index partners have come to a ‘workable conclusion’ and that this should enhance the STI’s relevance as the market’s leading barometer.