SGX CEO – on initiatives to attract SPAC lists to Singapore, technology IPO


Auditorium of the Singapore Stock Exchange (SGX).

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SINGAPORE – Singapore Stock Exchange it could receive its first application for the SPAC list in “the next few weeks,” CEO Loh Boon Chye said in an exclusive interview with CNBC.

SGX announced earlier this month new rules that allow a list of SPACs on its platform. Loh said the exchange is talking to potential sponsors and sees a “robust array” of potential ads.

“We think some of them will succeed in terms of looking for work in the next few weeks,” the CEO said.

“But it is obvious that the market must endure in order to be in surrender and really list and raise funds,” he added. “If markets continue to grow well, we think some of those pipelines will crystallize into real IPOs.”

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SPACs, or special purpose procurement companies, are shell companies without any business. They are created and sponsored – usually by institutional investors – for the sole purpose of raising money through initial public listing, and eventually acquire another operating business.

SPACs have been around for decades in the U.S., but have become popular in recent years as an alternative way for private companies to list on the stock exchanges as they bypass the traditional IPO route, which can be a time-consuming and complicated process.

SGX has sought to step up IPO activities in Singapore for years, but has struggled to acquire important technology offerings that have been one of the world’s most popular investment trends.

On Friday, the Singapore government announced a package of initiatives for lure to the list of “promising companies with high growth” in the city-state.

Attracting technology IPOs

The Covid-19 pandemic caused economic uncertainty, but did not significantly reduce optimism among investors, Loh said. Such a market feel, along with the efforts of the government and SGX, could help boost IPO activity in Singapore, the CEO said.

“In the current environment with low interest rates, investors have to look for a return, a return. And that continues,” he said. “A low-interest environment is generally positive for stocks and, consequently, for raising capital or listing on stocks.”

In the first half of 2021, SGX had three IPOs with a total revenue of $ 337 million ($ 250.54 million), according to Deloitte. That’s compared to 11 IPOs that raised about $ 1.34 billion in 2020, the data showed.

Although technology stocks attracted a lot of investor attention last year, Loch said companies in the “traditional sectors” were resilient to the pandemic.

“Don’t forget that these are strong sectors and within that, if they are strong companies, they reward shareholders,” the CEO said.

The scale of Singapore Straits Times Index finance and asset stocks dominate. It has surpassed many of its regional competitors this year, gaining about 7.8% since closing on Thursday.

As companies in the digital economy sectors grow, it is natural that SGX will experience some changes in the composition of its listed companies, Loh said. He told CNBC that he hoped the initiatives announced by the government on Friday would bring more technology companies to the SGX list.

“Some of these new companies we’ve talked about … doing business outside of Singapore, doing business outside of Singapore in this part of the world, hopefully some of them will come to market.”

– Weizhen Tan of CNBC contributed to this report.


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