New FTSE ST Catalist Index to launch in June (BT)

BackMay 21, 2009

SPH, together with SGX and the FTSE group, will launch the new index that will let investors track performance of sponsored firms listed on Catalist.

By Teh Shi Ning
The Business Times


ON June 22, Singapore Press Holdings (SPH), Singapore Exchange (SGX) and the FTSE Group will launch the new FTSE ST Catalist Index.

This new index will enable investors to track the performance of sponsored companies listed on Catalist, the three parties said in a joint announcement yesterday.

An all-share index, it will only include sponsored companies listed on Catalist, and will be adjusted for free float in line with the FTSE ST Index Series ground rules.

Review of the index constituents will be conducted semi-annually in March and September to include new listings and existing companies that have transitioned to sponsor status.

No companies will be added between reviews, and no liquidity screen will apply.

The FTSE ST Catalist Index values will be displayed alongside the real-time, intra-day values of the Straits Times Index and other FTSE ST Indices on the relevant SPH, SGX and Catalist websites.

FTSE will also distribute the new index real-time via its Global Distribution System, and display the end-of-day index values on its website.

Lawrence Wong, executive vice-president and head of listings at SGX, said: 'The new Catalist index will raise the profile of companies under the sponsor-supervised regime.'

Catalist, which replaced the old Sesdaq junior board in late 2007, runs on a market model, where fast-growing companies are brought to list by approved sponsors.

It is thus these sponsors, and not SGX, who determine whether a company is suitable for entry. Sponsors will also supervise listed companies' continued compliance with the exchange's rules, and must be engaged for certain corporate actions and transactions.

SGX has set a February 2010 deadline for companies in transition from Sesdaq to appoint a sponsor, failing which they face delisting.

However, progress has been slow, in part because the economic downturn has led to more reluctance among the typically small Catalist-listed firms to incur additional costs.

The incremental cost of sponsorship can be $90,000 to $100,000 a year.

There are now 45 sponsored companies on Catalist, including new listings, but 87 companies have yet to appoint a sponsor. Of the 19 approved sponsors, seven have been appointed so far.