Raise the bar for firms with IPO plans

While I am happy to learn that the Singapore Exchange is going all out to provide support for companies after they go public ("Post-IPO support robust, says SGX"; Monday), perhaps it could provide details of how these efforts, like raising the new listing candidate's profile, have helped investors at large.

Many of the recent IPOs have fallen to way below their listing price levels and this is not going to tempt new retail investors into investing their hard-earned cash into future similar IPOs.

Often, the concern raised was that for some of the recent IPOs, their valuations appeared to be too high to begin with, at their reference listing price.

All things being equal, the prices of these counters will, after a while, settle at close to their fair values.

To be fair to SGX, it can do only so much by way of organising corporate days, both locally and overseas, because if a counter is deemed to be a lemon in social media, it will remain as such after all the high-level client-profiling events have concluded.

The solution to the current malaise in the local IPO scene is to return to basics - to raise the bar for all aspiring IPO candidates, so that only quality companies get and remain listed.

Once this is done, there is no further need for client-profiling events or even the much-maligned minimum trading price requirement.

Natarajan A.

A version of this article appeared in the print edition of The Straits Times on October 08, 2015, with the headline 'Raise the bar for firms with IPO plans'. Subscribe