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:: Singapore Investment Banking Association
CORPORATE FINANCE
Summary of activities during year to October 2009
Luncheon Talk on Foreign Listing by Securities Commission and Bursa Malaysia in Singapore July 2009
A luncheon talk on a new initiative by Securities Commission and Bursa Malaysia Securities Bhd(Bursa) to streamline Malaysian Main and 2nd Boards to a unified board and the repositioning of the existing MESDAQ Market was held on 7 July 2009. It was attended by members from the corporate finance industry in Singapore. Speakers include Ms Wong Sau Ngan, General Counsel of Securities Commission and Sureson Krisnasamy, Senior Manager of Bursa. Mr Inderjit Singh, Bursa Head of Listing Divison was also present to answer queries from the members. Mr Gerald Ong Chairman of CF Committee gave the opening address.
The talk was centred on the following key points:
Main and Second Boards to merge into a Unified Board (Main Market)
MESDAQ Market to be transformed into a alternative market (ACE Market)
New approaches to regulating listings and fundraisings
Launched on 8 May 2009, the Main Market and ACE Market will entail a new board structure, new regulatory approaches and new guidelines. This will take effect on 3 August 2009. Ms Wong elaborated on the rationale and benefits on the changes. The rationale and benefits include staying competitive in a progressive market, streamlined structure for established and emerging companies to raise capital and fundamental shift to a market-based regulatory approach. The new structure for the Main Market is for established companies with certain track record and criteria. The ACE Market is for all companies/sector.
Mr Sureson covered details of equity guidelines and major criteria adopted for new listing in Main Market. He also elaborated on simplified entry criteria of ACE Market giving greater empowerment to sponsors and enhanced business efficacy and efficiency.
The panel discussion was lively with questions from the members. The talk was useful to provide a good insight and understanding of the new Main Market and ACE market in Malaysia.
For more details of the talk, please refer to the attached powerpoint briefing. In pdf format:
pdf of presentation file 1of2
pdf of presentation file 2of2
Due Diligence Guidelines for Initial Public Offerings
The Guidelines for Due Diligence for IPO Offering in Singapore launched in August 2004 and with the assistance and advice of Stamford Law Corporation, a working group was formed in October 2006 to update this. The final version was approved by the MAS July 2008 and is posted on the SIBA website.
Given the financial meltdown and changes arising from it, the working group decided to update the July 2008 version to incorporate some changes. The working group hopes to finalise in 2010.
Issue of IPO comfort letters
An exposure draft of the Audit Guidance Statement (AGS) on the issuance of comfort letters, for Singapore IPO offerings was circulated by the Institute of Certified Public Accountants of Singapore (ICPAS) in 2004. Reporting auditors have to issue comfort letters for Sponsors, Issue Managers and Underwriters in connection with the financial information contained in the Public Offering documents lodged with the Monetary Authority of Singapore under the Securities Futures Act.
Several meetings were held between the taskforce of ICPAS and a SIBA working group in 2006 and 2007 to work on a revised exposure draft after the AGS drew strong objections from the corporate finance industry. SIBA submitted a final response in November 2007 to ICPAS.
In August 2008, ICPAS issued a re-exposure draft of the comfort letters guidance and invited SIBA to provide its comments on the guidance. The SIBA working group responded to the general principles of the proposed AGS and reiterate past comments that had not been incorporated example liability cap. The final response from SIBA was submitted in December 2008 to ICPAS.
SIBA-MIBA Dialogue August 2009
The annual meeting of corporate finance professionals from Singapore was hosted by MIBA at Le Meridien, Kuala Lumpur in August 2009. The SIBA dialogue was chaired by Mr Gerald Ong, Chairperson of SIBA Corporate Finance while the MIBA dialogue was chaired by Ms Pushpa Rajadurai, Chairperson of MIBA Corporate Finance.
An update of the events for the year was provided by both the chairpersons. In Singapore, the activities on SGX and the numbers of IPOs had declined significantly. First quarter of 2009 was slow as high market volatility and depressed valuations had put the brakes on new listings. During the month of June and July 2009, more activities were seen picking up. However, getting M&A activities done have been difficult as financing is still an issue in the current market.
Like Singapore, the trading volume in Malaysia had also declined substantially. First quarter of 2009 was slow with only one IPO but there was an increased in IPOs approval to seven in the second quarter 2009. Also, a recent change in listing rules has made it more attractive for companies to list in Malaysia. There has also been an increase demand for issuance of exchangeable bond structure.
It was an useful update of market trends and best practices in the respective markets and a constructive exchange of views sought by both parties.
Other topics discussed included the:
Receptivity of institutional investors in Malaysia to PRC companies listing
Corporate transparency and compliance given the increased focus by the Securities Commission and Bursa on corporate compliance
Due Diligence process on companies listed on ACE board and Main Board
Impact on human resource given the slow down in investment banking activities in Malaysia
Avoidance of potential S-chip problems
Catalist
Secondary market
Listing of SPACs
Views on FIC Guidelines
Criteria of a stock exchange to form an alliance
