Shares as payment

Sentosa being changed

On Aug 13 and 14 in the Business Times, Jamie Lee reported that PrimePartners, a Catalist sponsor, received 7.56 millions Healthway shares for helping Healthway get listed on Catalist.

The question here is whether it is all right for Catalist sponsor to receive the shares as compensation. I wish to present the pros and cons for your decision.

Yeo Lian Sim of Singapore Exchange said it is ok for the following reasons:-
a) Catalist sponsors are of so high a standard and with so good track record that they have an independence of mind not to be tainted and tempted by the 7.56 millions.
b) It is ok for the sponsored company to pay in kind so as to allow them to conserve cash to fund their business.

PrimePartners said sponsors receiving shares is not an uncommon practice. It is practiced in London's Alternative Investment Market.

The Cons:-
a) What would or could happened to the minority shareholders when the sponsor decide to sell the 7.56 millions shares in one shot? (concern of overhang or sudden deluge of shares)
b) There could be an overriding desire to put up a "good" show to ensure the shares get a good price by over emphasing the positives and relatively quiet on the negatives. (lack of independence and professionalism)

My final question here
If it is all right for Catalist sponsors to receive shares as payment, will SGX approve other professionals like lawyers, accountants, auditors etc (who are also involved in the process) to get compensated in the same way?

2 months ago

About two months ago, I received a sms from an ex-colleague, who had been quiet for quite some time, with an invitation to meet up for a meal.

I accepted the invitation. During the dinner, we ended up talking about investment. I got a feeling after the whole thing that she could be sizing me up for an introduction to her boyfriend working in the investment line.

She mentioned about this investment talk that she has attended where the instructor was teaching about how to make money through some investment technique that he has become aware of.

Edgar's response then - Did you ask the guy why he is sharing with a whole bunch of people in class after class the secret to making money?

She said then she has just invested some Singapore/Malaysia funds.

Edgar's response then - I am looking to build up a sizable war chest (by opening credit lines) to buy when the market crashes.

She said she would be very interested to take on the position of marketing for investment houses.

Edgar's response then - Why?

The lean years could be here and we must know that money may no longer be easy to come by.

Why the rental spike over the last 3 years?

I am duly enlightened about the escalating rental situation in Singapore over the last 3 years when I came across this gem article written by Mr Colin Tan, head of research at Chesterton International in yesterday's TODAY.

The number of rental contracts peaked at 29,694 in 2005. The average for 2006 and 2007 is 25,173. There is thus a contraction of 15%.

The average cost of rentals rose by 15% in 2006 and 43% in 2007.

So what is the cause for this phenomenon?
Mr Tan concluded from his research that the rental spike is caused by the sharp contraction in supply due to en-blocing.

It is definitely not due to increased demands from executives coming to town working on the IR projects nor due to thousands of foreign students pursuing their education here.