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SGX's Catalist trade on the rise

Trading interest in Catalist-listed companies has risen considerably last year. Turnover value on the Singapore Exchange's Catalist board accounted for 5.5 per cent of total market turnover value in 2013, more than double the 2.4 per cent from the year before.

SINGAPORE: Trading interest in Catalist-listed companies has risen considerably last year.

Turnover value on the Singapore Exchange's Catalist board accounted for 5.5 per cent of total market turnover value in 2013, more than double the 2.4 per cent from the year before.

Trading activity on the Catalist board has grown significantly over 2013.

According to SGX data, the total value of Catalist-listed shares traded last year jumped 147 per cent from 2012, far exceeding the 5.7 per cent increase on the Mainboard.

Geoff Howie, director of market strategy sales and clients at SGX, said: "The Catalist board itself makes up around 1 per cent of the total market capitalisation of all stocks listed on the SGX, and last year the turnover of those 140 over stocks that are on the Catalist board accounted for 5.5 per cent of turnover of all stocks listed on the exchange.

"And we are seeing larger capitalised companies list on the Catalist board. If you look at the 10 or so biggest companies in terms of capitalisation on the board, five of those companies were listed on the Catalist last year.

"So if you look at the very three biggest, you'll see that they all have market capitalisation above S$600 million, and the nine largest stocks on the Catalist all have market cap above S$200 million."

There are 141 stocks listed on the Catalist with a combined market capitalisation of S$9.4 billion.

The higher volatility on the Catalist board tends to draw investors in search of trading opportunities but greater share price fluctuations also entails different risks.

Kelly Teoh, market analyst at IG Markets, said: "Most people who trade on the Catalist, I would imagine they're not holding it for a long period of time, whereas if you're looking at the Mainboard, you're looking for a longer term holding period.

"So it's a very different type of investment, and like all investments they just need to understand the risks when they get into it."

Companies seeking a primary listing on the Catalist must be brought to list by approved sponsors.

Meanwhile, certain sectors are becoming increasingly keen on Catalist listings.

Some market participants observed that companies that seek listings on the Catalist board are typically from the property and construction sector, but the industry has been impacted by recent property cooling measures.

Joan Ling, senior vice president for corporate finance at Hong Leong Finance, said: "Now it is the other industries that are making their way for listing. The other industries are looking for listings because they have expansion plans. Oil and gas do have business coming in as Singapore is an oil and gas centre.

“So all this is to do with the economy. Medical -- we are a medical hub, so our medical industry is moving. (The) chemicals (industry) is part of oil and gas, it’s downstream, so chemicals (sector) is also moving."

Of the five new mineral, oil and gas companies listed on the Singapore Exchange last year, three were on the Catalist board.

Recent Catalist listings in the sector include Rex International Holding, AsiaPhos, Wilton Resources.

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