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SGX, Changi Airports International launch index for global travel, aviation stocks

SGX, Changi Airports International launch index for global travel, aviation stocks

Source: Business Times
Article Date: 26 Nov 2021
Author: Vivienne Tay

SGX developed the index as part of its iEdge product suite in a "first-of-its-kind" collaboration with GateEq.

The Singapore Exchange (SGX) and Changi Airports International (CAI) have launched the iEdge-GateEq Aviation and Travel Index, a market capitalisation-weighted index that covers the top 50 listed companies in the global travel and aviation industry.

These are companies that derive revenue from 6 sectors, namely airport infrastructure and services; airlines; original equipment manufacturer and system providers; air freight and logistics; travel and booking services; and hospitality.

The top 10 constituents of the index are UPS, Booking Holdings, Airbus, FedEx, Deutsche Post, Safran, Airbnb, Marriott International, Southwest Airlines and Hilton Worldwide. SGX will review the index constituents on a quarterly basis.

The tradeable index aims to capture global aviation and travel-related long-term growth. This comes as borders reopen and travel restrictions ease, SGX and CAI said in a joint press statement on Thursday (Nov 25).

They noted that the index reached pre-Covid-19 levels in October 2021, driven by a rally in hospitality, travel and booking-related stocks. Airlines and air freight stocks, however, remain laggards.

SGX developed the index as part of its iEdge product suite in a "first-of-its-kind" collaboration with GateEq, a strategic initiative by CAI -- the consultancy and investment arm of Changi Airport Group.

Ng Kin Yee, SGX managing director and head of data, connectivity and indices, said the aviation and travel sector is one that is keenly watched by investors seeking to capture post-pandemic growth.

"While growth across the industry may be uneven, we hope that this index will serve as a yardstick and source of insight for investors and the wider industry, and we certainly look forward to this ongoing partnership with CAI," he added.

CAI chief executive Eugene Gan said: "Notwithstanding CAI having established a global footprint covering multiple airports across different regions, we believe this is the first occasion in the world where an airport group is working with a leading index market provider to provide such a unique solution for the financial market."

SGX shares were trading 0.4 per cent or S$0.04 lower at S$9.25 as at 2.43 pm on Nov 25.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

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