By Lee Su Shyan, Assistant Money Editor

A NEW index to track stocks on the Singapore Exchange's (SGX) secondary Catalist board will be launched on Monday.

The index - known as the FTSE ST Catalist Index - will allow investors to keep track of the performance of the bourse's smaller companies, which are generally at an early stage of growth.

Catalist is the successor to Sesdaq.

The index will join a group of indexes, which are part of the current FTSE ST Index series that has been developed jointly by Singapore Press Holdings, SGX and Britain's FTSE Group.

To help with historical analysis, the index uses 1,000 as its starting point, and this level is based on stock prices as of Sept 19 last year.

There are now 129 companies listed on the Catalist board, but the new index will have 35 component stocks.

These include firms such as Japan Foods, Armarda Group, Lasseters International Holdings and C20 Holdings.

The new index will include only Catalist stocks that already have a sponsor - an adviser who is supposed to lend a guiding hand to the company in its first two years as a listed entity.

Companies transiting from Sesdaq to Catalist have been given until February next year to appoint a sponsor, or face the threat of delisting.

'The new Catalist index will raise the profile of companies under the

sponsor-supervised regime,' Mr Lawrence Wong, SGX's executive vice-president and head of listings, had said earlier.

Mr Ignatius Low, money editor of The Straits Times, said the new index 'further enhances the value of the FTSE ST series of market indices to investors in capturing movements and developments on the Singapore bourse'.

Companies that make up the index must also have a sufficient 'free float', which refers to the number of shares readily available in the market and excludes those held by directors, major shareholders and employees.

This free float must account for more than 15 per cent of a company's total number of shares.

There are currently 20 indexes in the FTSE ST Index series. They include the most widely known Straits Times Index, which comprises 30 blue chip stocks, the FTSE ST Mid Cap Index as well as the FTSE ST Small Cap Index.

Reviews of the Catalist Index will be conducted in March and September each year, when new listings and existing companies that have engaged a sponsor will be added.

This article was first published in The Straits Times.