Catalist stocks underperforming, says study co-authored by Prof Mak, Companies & Markets

Catalist stocks underperforming, says study co-authored by Prof Mak, Companies & Markets

Wed, Aug 12, 2020 - 12:21 PM THREE quarters of the stocks that stay listed on Singapore Exchange (SGX)'s Catalist board for more than seven year

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Wed, Aug 12, 2020 – 12:21 PM

THREE quarters of the stocks that stay listed on Singapore Exchange (SGX)’s Catalist board for more than seven years have underperformed, a fresh study revealed.

The study – co-authored by associate professor Mak Yuen Teen of the NUS Business School and Chew Yi Hong, an active investor and researcher – looked at Catalist issuers with fiscal year 2019 net income available.

The report showed that out of 214 companies, 56.5 per cent or 121 companies made losses for FY2019. Among those listed fewer than 7 years, 37 per cent are making losses. Among those that have been listed for more than 7 years, 71 per cent are making losses. 

“While not conclusive, this is contrary to expectations as one would expect growth companies to start as relatively unprofitable companies and become more profitable over time,’’ the authors said, urging that a review of the Catalist board be undertaken.

The report also highlighted the conflicts of interest in the sponsorship regime, due to business relationships between sponsors and the companies they sponsor.



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