Singapore primed to be the new hotspot for SPAC IPOs

SPACS accounted for over 75% of total SGX listings.

The Lion City is likely to emerge as the new hotspot for special purpose acquisition company (SPAC) initial public offerings (IPOs), according to the latest report by GlobalData.

In the Singapore Exchange (SGX), around 75% of the total listings and 98% of total capital raised during January 22 were made up of SPACs or blank-check companies.

Three SPAC IPOs—Vertex Technology Acquisition Corp (VTAC), Pegasus Asia (Pegasus), and Novo Tellus Alpha Acquisition (Novo Tellus)—were also introduced by SGX. The three raised $520m during the month. All these three IPOs were subscribed seven to 36 times, which, according to GlobalData, reflects a strong investor sentiment.

According to the GlobalData: "SPAC is a quicker and more economical way for a company to go public. It is a shell company with no revenue-generating business and no prior operating history. It is necessary for a SPAC to announce the combination with a target operating company, referred to as a ‘de-SPAC’ transaction’, within 24 months of IPO listing and complete the transaction within 36 months."

“The emergence of SPAC IPOs in Singapore follows the implementation of new rules in September 2021 that enable blank-check companies to list on SGX’s mainboard. During the first phase of the COVID-19 pandemic, blank-check companies (SPACs) remained one of the [favourite] forms of fundraising in the US. This also led to an increase in interest in SPACs in Asia, with Singapore and Hong Kong relaxing rules to allow blank-check companies to get listed on the mainboards of bourses,” said Keshav Kumar Jha, Business Fundamentals Analyst, GlobalData.

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