Singapore Exchange Ltd plans to list blank-check companies this year if it gets sufficient support from the industry, according to Bloomberg. CEO Loh Boon Chye expects an impending market consultation on special purpose acquisition companies this quarter to take some time to get feedback.
- SPACs became popular last year with the wealthy and private equity funds rushing to set up new ones.
- SPACs are increasingly seen as an appealing alternative route to public markets since the process avoids the risk and uncertainty of an initial public offering.
- Despite their growing popularity, SPACs are being criticized for their structure, where managers or founders collect fees as an alternative to find a target and complete a deal.
- Singapore initiated a consultation on SPAC listings in 2010, but faced low demand among businesses and investors.
- Loh believes capital markets have evolved to accommodate SPACs while limiting market risk by providing an alternative avenue for investment.
- SPACS are expected to revive investor interest in Singapore’s stock market which has struggled to attract big-ticket IPOs over the past years.
SPACs have raised over $38 billion in 2021, almost half of the money raised in 2020