SGX is the first major Asian stock exchange to allow the entry of SPAC, starting on September 3rd


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The Singapore Stock Exchange (SGX) will allow companies to be listed in Singapore from Friday (September 3rd) through the Special Purpose Company (SPAC) framework.

The guidelines are under a more liberal rulebook than the exchange initially suggested. First, a minimum market capitalization of $ 150 million ($ 112 million), half of the amount previously proposed by SGX, according to the statement from SGX on Thursday. Certain restrictions on orders and share repurchases have also been removed.

SPACs, also known as “blank check companies,” have been around since the 1990s. They have recently gained popularity due to the favorable framework that benefits many companies and investors – such as faster listing and fundraising.

SPACs raise money from investors and then seek to acquire another company, usually privately, within a certain time frame.

SGX CEO Loh Boon Chye is earlier set a goal to make the stock market list its first SPAC this year.

Competitive SPAC market

SGX is the latest in a series of global financial markets to open up to SPAC lists in the last year. Popular SPAC markets are in the US, including the NASDAQ.

Relaxed rules come after market feedback. The stock market proposed stricter restrictions than the U.S. because it wanted to increase safeguards to protect investors while strengthening the local IPO market.

With this move, Singapore is one step ahead of its Asian rival Hong Kong. This year, companies worldwide raised a total of $ 130 billion through SPAC, Bloomberg data showed.

Returning local technology companies to the list here

For years, Singapore has struggled to attract top tech players for IPOs. Popular technology companies in Southeast Asia, such as Sea Ltd and gaming hardware maker Razer, have opted for listings anywhere except in their home country.

He also recently announced a technological unicorn Grab from the country plans to go public through a SPAC deal with the U.S. Nasdaq, as has been the case so far PropertyGuru and reportedly Carousell on foreign stock exchanges.

The latest move could see more lists of tech unicorns based locally in Singapore.

SPAC’s offering can provide SGX with much-needed visibility to attract companies that are ripe for listing, in the midst of a competitive global public market.

Last year, there were more than 165 global SPAC companies on the list, five times more than in 2015.

Highlight Credit: Fintech News


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