Catalist for better business in SE Asia

Singapore Exchange Limited (SGX) announced recently the establishment of a new second board, a sponsor-supervised listing platform for high-growth companies, both local and international.

The new board, called "Catalist", provides another platform besides the main board for Chinese companies wanting to raise funds in Singapore.

Catalist is an updated version of SGX's current second board SESDAQ, established over 20 years ago.

The new second board adopted a similar market model to that of the London Stock Exchange's second board AIM, which allows sponsors to determine the suitability of a company for listing without SGX reviewing the admission of the company.

Lawrence Wong, senior vice-president and head of listings with SGX, told China Daily that the new board would help SGX attract high-growth companies in China. But he added this would not mean that SGX would change its current strategy in China.

"We do not focus on any specific industries and welcome Chinese companies from all sectors to list on SGX," Wong said.

According to Hsieh Fu Hua, CEO of SGX, the listing process for Catalist would be cut to between five to six weeks from the current 12-17 weeks for SESDAQ. The minimum fee for an initial listing on Catalist will be S$30,000 ($20,800) and the minimum annual listing fee will be S$15,000.

The rules and processes for secondary fundraising and business expansion in Catalist have also changed to meet the needs of growth companies.

Currently, 16 Chinese companies are listed on SGX's SESDAQ and these companies will be moved over to Catalist in two years. With the launch of the new board, it is expected that more Chinese high-growth companies will be attracted to list in Singapore because the board offers a faster and simpler way to raise capital.

In the past few years, SGX has been particularly attractive for Chinese manufacturing companies. Statistics from the exchange show that among the 136 Chinese companies listed on SGX, over 60 percent of them were manufacturers.

Earlier this month, SGX gained approval from the China Securities Regulatory Commission to set up a representative office in Beijing. SGX became the fourth foreign exchange to establish such a presence on the mainland following the New York Stock Exchange, NASDAQ, and the Tokyo Stock Exchange.

Just like the Hong Kong exchange, SGX is prospering on the back of the mainland boom, thanks to cultural and language similarities.

Singapore is considered the "natural gateway" via which Chinese companies can establish business relations with Southeast Asia and other regions.

But unlike Hong Kong, which seems to be a natural stepping-stone for mainland companies making their way onto the world stage, SGX's focus is by no means limited to Chinese companies.

"Being centered in Asia, Catalist will primarily, but by no means exclusively serve Asian companies and investors," SGX Chairman JY Pillay said.

"That positioning is consonant with SGX's role as an Asian hub for global markets."

According to SGX figures, 736 companies were listed on SGX's main board and SESDAQ by October, with 272 of them foreign companies, accounting for 37 percent of the total listings.

The first group of sponsors for Catalist is expected to be announced by January 2008, when the new board will be open for initial public offerings under the new regime, according to CEO Hsieh Fu Hua.

Current SESDAQ companies will continue to be governed by the existing rules, Hsieh said. They will have at least two years from the announcement of the first batch of sponsors to appoint a sponsor and comply with the new rules. To assist transition of SESDAQ companies to Catalist, SGX plans to waive their listing fees for three years from the time they engage a sponsor and enter the new regime.

(China Daily 12/14/2007 page15)