Catalist meeting needs of growing companies; getting more investor interest

47 per cent of funds raised in Catalist in last two years were by issuers with majority business outside Singapore


THE Catalist board is attracting more growth companies and also getting more investors as it is the most liquid platform among its peers, said Singapore Exchange head of equity capital market and capital market development Mohamed Nasser Ismail.

The junior board for high growth enterprises in the past five years has gotten traction, said Mr Nasser on Friday in a media briefing on the cusp of the 10th anniversary of Catalist, which replaced the old Sesdaq secondary board in 2007 with a sponsor-led regime.

He said interest from both international and retail investors has grown, with institutional ownership doubling since 2010.

The number of Catalist companies is also diversified by sector and geography, he said.

"The Catalist board is relevant not only to Singapore companies and as well as regional companies; it's also as far away as America and frontier regions like Armenia and Central Asia," said Mr Nasser.

"Companies from the US of a certain profile may find Catalist interesting," he said, adding they will find opportunities from the Nasdaq-SGX collaboration.

The SGX on Wednesday signed an agreement with Nasdaq Inc that will see the two exchanges working to facilitate a concurrent or sequential listing on both bourses.

A joint statement said the two parties hope to enhance the channels available for companies to access capital market funding and enhance their corporate profiles in New York and Singapore.

Forty-seven per cent of funds raised in Catalist in the last two years were by issuers with majority business outside Singapore. Some of the foreign Catalist companies are from China, Malaysia, Indonesia, Sweden, Japan, Korea, Australia and Israel.

There will be a few more new listings by year's end, and the number of Catalist-listed companies should surpass 200 from the current 197, said Mr Nasser.

A total of 14 companies have completed initial public offerings on the SGX so far this year, raising S$3.1 billion of proceeds. Of those, 10 listed on Catalist, raising S$201.5 million.

"The Catalist board is able to meet the needs of various sectors to fund their next stage of growth," he said.

Liquidity has also increased on Catalist and it is the most liquid platform among its peers, he noted. "It is outperforming all of them."

Using turnover velocity - which tracks how frequently a stock changes hands - Catalist's 5-year median turnover velocity is 129 per cent, against 60 per cent on Hong Kong's GEM and 62 per cent on London's AIM.

Critically, Catalist companies are also able to access capital further.

Catalist companies have been able to raise S$3 for every S$1 they got from the initial listing via the secondary market, right issues and placements.

Today the combined market capitalisation of Catalist is around S$12 billion, up from S$5.5 billion in 2010.

Mr Nasser also spoke of two initiatives which will help raise awareness of Catalist companies.

An industry-led Association of Catalist Companies and an investor portal will be launched next week. The portal will provide data and research on Catalist companies which generally are not covered by broking houses.

On the perception that Catalist companies are more risky, Mr Nasser said the sponsors work very hard and the risk is what the sponsors are comfortable with. In addition the regulatory regime is very strong, with no compromise, and companies have to be responsible to investors, he said.

"Singapore has high regulatory standards, we make no apologies nor compromises."