The Catalist conundrum which shows no sign of getting resolved

EVEN though the Straits Times Index (STI) has not performed this year, it is still hovering around a two-year high, having gained some 130 per cent since the low reached during the 2008 US sub-prime crisis.

In contrast, the FTSE ST Catalist Index has, over the past few weeks, been sinking to consecutive five-year lows. This vastly divergent performance is partly due to October 2013's penny stock crash which badly dented retail investor confidence; in the 17 months since that collapse, the Catalist index has lost 42 per cent.

But Catalist's problems run deeper than a dearth of speculative retail players. In its 28 years of existence, it has not been able to shake off its "poor relative" label - the perception that it is inferior to the main board. It is an image which has plagued the second board from 1987 when it was launched as Sesdaq, a platform for smaller companies to raise capital, and it is an impression which exists today. The challenge then, which the finance industry has never quite come to grips with through the years, is how to raise the profile of this junior listings board and make it an attractive listings destination.