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Catalist set for first IPO as sponsor list is unveiled
Goh Eng Yeow Tue, Feb 05, 2008 The Straits Times
LIKE an expectant first-time mother, Catalist, the new board that replaced Sesdaq in December, is looking forward to its first initial public offering (IPO). A vital step came yesterday with the appointment of the first group of professional financial advisers. These 'sponsors' will play a central role in Catalist's new approach to fostering listed businesses by ushering companies through the listing process, then mentoring them later on. They were introduced with much fanfare at the Singapore Exchange (SGX) in what was dubbed as the first day of spring - one of the most auspicious days on the Chinese calendar. The unveiling also took place against the backdrop of a hongbao rally, with the benchmark Straits Times Index soaring by as much as 3 per cent and China's Shanghai Composite Index advancing 8.1 per cent.

Catalist is part of the SGX's strategy to give small, fast-growing firms, as well as large ones, a viable Asian listing destination other than London's Alternative Investment Market (AIM).

Unlike in a mainboard listing, Catalist hopefuls need not formally demonstrate a business track record or meet financial entry requirements. Once they are listed, Catalist firms also have a freer hand to raise funds and engage in merger-and-acquisition activities.

They do need to have a sponsor to hold their hands, though.

SGX head of listings Lawrence Wong said yesterday that the response to Catalist had been very encouraging.

The existing 150-odd Sesdaq firms, which have been given a transitional period of at least two years to get a sponsor, will also be given plenty of opportunities to meet the financial advisers and form partnerships.

Initially, the SGX appointed 10 firms to be full sponsors and another six to be continuing sponsors. It also 'approved' 72 professionals from these firms to do work linked to Catalist.

Full sponsors are financial advisers that can prepare a Catalist hopeful for listing and mentor it while it stays on the board.

The 10 include the Big Three local banks - DBS Bank, OCBC Bank and UOB Asia, United Overseas Bank's investment banking arm - and investment banks Merrill Lynch and Morgan Stanley.

Others on the list are HL Bank, local brokerages Phillip Securities and CIMB-GK, boutique finance house PrimePartners Corporate Finance, and Collins Stewart, which has experience in handling London's AIM listings.

The continuing role of the sponsors is to mentor firms while they stay on Catalist.

They include boutique corporate finance houses Asian Corporate Advisors and Boulton Capital Asia, as well CNP Compliance, KW Capital, R&T Corporate Services and Stamford Corporate Services, all of which are linked to well-known law firms.

That the initial list of sponsors should come from reputable investment houses that have already launched IPOs in Singapore should come as no surprise, said SGX's head of risk management and regulations, Ms Yeo Lian Sim.

'It gave us a lot of assurance, and it gives the market a lot of assurance of the standards expected of Catalist listings,' she said.

The SGX has another four professional financial advisers in the pipeline applying to be sponsors.

SGX head of markets Gan Seow Ann disclosed yesterday that the exchange was in the midst of discussions to bring back real-

time values for the UOB Catalist Index, which tracks the performance of penny stocks.

Since last month, only the closing value of UOB Catalist Index has been available to investors.

engyeow@sph.com.sg