Hong Kong’s first SPAC slips in IPO debut as city embraces blank cheque companies as new fundraising avenue

Name: SPACs: Everything you need to know about the finance world’s new big thing
Uploaded: 2022-03-18T02:41:14.000Z
Duration: 3 min 34 s
Description: SPACs: Everything you need to know about the finance world’s new big thing

The first SPAC in Hong Kong fell 3.2 per cent in trading debut after raising HK$1 billion from 99 professional investors; retail investors are not allowed to trade SPACs

HKEX, which started accepting SPAC IPO applications in January, has received 10 candidates as of this week

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The Hang Seng Index on display outside Dah Sing Bank at World Wide House in Hong Kong’s Central district on 16 March 2022. Photo: Jonathan Wong

Enoch Yiu

Published: 10:41am, 18 Mar 2022Updated: 5:33pm, 18 Mar 2022

Aquila Acquisition, Hong Kong stock exchange’s first special-purpose acquisition company or SPAC, fell 3.2 per cent in its trading debut, underlining the city’s efforts to protect retail investors from newfangled investment vehicles.

The stock, which can only be traded by professional investors, fell to HK$9.68 at the close of trading, according to exchange data, versus its HK$10 offering price. Only 2 million shares changed hands. Off-market direct deals were earlier marked at HK$8.38 and HK$8.80. Hong Kong’s bourse operator barred retailers from trading such SPACs.

Aquila’s listing on the Hong Kong stock exchange came as the Hong Kong Exchanges and Clearing embraces new fundraising avenues to broaden its revenue with SPACs the latest novelty. They are known as blank cheque companies because they raise funds before scouting and acquiring new operating assets.

Shares of Aquila, backed by the Chinese broker CMB International Asset Management, were snapped up by 99 professional investors who ploughed over HK$1 billion (US$128.3 million), the minimum listing threshold. The cash would be used to buy assets in the new economy sector, it said.

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SPACs: Everything you need to know about the finance world’s new big thing

Aquila’s debut came at the end of a tumultuous week for Asia’s third-largest capital market, where the benchmark Hang Seng Index gyrated from a 10.4 per cent tumble on Monday and Tuesday to a 9 per cent surge on Wednesday, before a stunning rebound sparked by China’s pledge of support.

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