Catalist IPOs: minimum public tranche needed

MOST of the initial public offerings (IPOs) this year have been on Catalist and many, if not all, have involved 100 per cent placement shares. Quite understandably this has upset many market watchers who have once again raised the question of whether more should be done to ensure the "P" in IPO stands for "public" instead of "private".

The Singapore Exchange (SGX) is aware of the clamour over the years for more public-tranche shares in IPOs and is currently studying feedback for a February consultation paper which suggested introducing a minimum public tranche of 10 per cent of offer shares for mainboard IPOs. If this is eventually implemented, why not extend this to Catalist?

The need to relook the 100 per cent placement avenue has been around ever since the Corporate Finance Committee (CFC) in 1998 recommended that companies should be allowed to give their shares to whoever they and their underwriters wish, even via full placement.