The craze for blank check companies could spread to Asia, where more regional startups are likely to explore this listing route, seeking to exploit the benefits of investor familiarity, time zones and less expensive paperwork.

Hong Kong Exchanges and Clearing Ltd., or HKEX, has opened a consultation on its proposed rules for ad hoc acquisition companies backbone organizations that start with the intention of buying and merging backwards with a private company – September 17th. Smallest rival Singapore Exchange Ltd., or SGX, is reportedly in discussions with potential listing candidates after its PSPC framework goes into effect on September 3. Elsewhere in the region, South Korea and Malaysia have allowed blank check companies to register.

Although the popularity of new PSPC listings in the United States has peaked, there will always be a place for such blank check companies, said Oi Yee Choo, commercial director of the based capital markets platform. in Singapore ADDX. “So, it’s never too late for HKEX, SGX, or another exchange to establish PSPC listing rules.”

“A PSPC can make good business sense as long as there is a credible sponsor who has what it takes to run the de-PSPC,” Choo said, referring to the requirement of blank check companies in Asia to generally find a merger target within two years, or to return the money to investors.

While exchange traders in the two Asian financial centers started talking about SPAC around the same time, Singapore has a head start as Hong Kong rules may take longer to take shape. The HKEX consultation with stakeholders is open until October 31, and the framework will take a little longer after that to be formalized. The proposed rules in Hong Kong exclude the participation of individuals in PSPC IPOs, another indication of a generally cautious approach as local investors have relatively less protection than in the United States.

Hong Kong will likely remain the place to collect natural capital for Chinese companies. Hong Kong has hosted 22 IPOs so far this year, raising $ 3.2 billion, while 11 companies have raised $ 1.2 billion in Singapore. Excluding retail investors cannot significantly limit the ability of PSPCs to raise funds in Hong Kong, given the presence of institutional and family wealth, Choo said.

Singapore’s ambition to become a global technology hub will likely encourage SGX to attract foreign and local sponsors. On September 17, the government announced a number of initiatives to help high-growth companies raise capital in Singapore to complement the PSPC framework.

“A key factor in attracting PSPC sponsors is the level of ease in finding acquisition targets and the recent wave of initiatives could help expand the pool of potential PSPC applicants in Singapore,” said Celeste Goh, analyst at S&P Global Market Intelligence.


PSPC’s first public offerings were particularly popular in the United States in 2020 and the first quarter of 2021. In 2020, PSPC’s IPO volumes climbed to $ 77.35 billion in 2020, according to data from S&P Global Market Intelligence. Initially, the trend continued in 2021, as it took just 70 calendar days to beat the total 2020 volume. Funds raised in the second quarter fell to just $ 17 billion, indicating a possible cooling.

“PSPC quotes are cooling in the United States for reasons that are generally good for the market in general, especially for retail investors,” said Saurabh Gupta, co-founder and board member of Vistas Media Acquisition Co. Inc., a NASDAQ listed SPAC.

According to Gupta, a number of deals have raised alarm bells with regulators and investors have lost money. Gupta added that PSPC’s sponsors should use the offer to identify real, high-potential and growing companies that will continue to grow after their merger and create long-term shareholder value, rather than bringing in startups and entities in the design phase at the table, where the predictability of business growth, revenues and the business model in general are uncertain.

Besides the great liquidity, the Asian sponsors of SPAC were drawn to the United States because they could register much faster than a traditional IPO, said Raghu Narain, head of the Hong-based investment bank. Kong at Natixis Asia-Pacific.

Asia Advantage

There are also some drawbacks to registering in the United States. Asian companies can avoid paying higher fees and having to organize roadshows for American investors. Time zones are often a challenge, as is the possible lack of understanding among investors of an Asian company’s equity history, Narain said.

“An Asian company must be prepared to be a public company in the United States. It means being prepared to meet regulatory requirements such as the SEC, quarterly reports, questions from equity research analysts and market review. public, ”Narain said.

Several Asian exchanges have sought to better protect equity investors, a factor that could help Hong Kong and Singapore, said Martin Hennecke, chief investment officer for Asia at St. James’s Place, a London-listed investment manager.

“The sponsors will, of course, look at the conditions and how favorable they are to them, and they will also take into account the liquidity of the market,” Hennecke said. The chief investment officer added that Hong Kong would be a more serious competitor to the United States in terms of market liquidity, but with the popularity of PSPC already slowing sharply, Hennecke doubts the launch of PSPC schemes in Hong Kong or Singapore. radically changes the situation.

Nonetheless, PSPCs are likely to remain an important way for companies to raise funds and register, said Scott Denne, U.S.-based senior research analyst at 451 Research, a unit of S&P Global Market Intelligence. “While the initial rush has subsided, PSPCs are likely to play a larger role in global stock markets than they have in previous years,” said Denne.

Asia has become the playground for potential acquisitions of SPACs which have already raised funds and must now conclude agreements with their targets.

According to data from S&P Global Market Intelligence, as many as 17 PSPCs headquartered in Asia are looking for a target. These include Bridgetown Holdings, which was formed by billionaire Peter Thiel in partnership with Richard Li, son of Hong Kong tycoon Li Ka-shing. Some Asian businesses that are about to list in the United States through a SPAC include Tim Hortons China, a subsidiary of Canadian coffee chain Tim Hortons, and Southeast Asian real estate classifieds platform PropertyGuru. Ltd, headquartered in Singapore.

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