Hong Kong’s planned SPAC rules could give it an edge in attracting Chinese tech, biotech firms

Name: SPACs: Everything you need to know about the finance world’s new big thing
Uploaded: 2021-09-27T00:30:14.000Z
Duration: 3 min 34 s
Description: SPACs: Everything you need to know about the finance world’s new big thing

SPACs have raised more than US$126 billion globally this year

Planned listing changes in Hong Kong may require fine-tuning, deal makers say

Reading Time:4 minutes

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Chinese and Hong Kong flags fly outside Exchange Square, which serves as headquarters to the Hong Kong stock exchange’s operator. Photo: EPA-EFE

Enoch YiuandChad Bray

Published: 8:30am, 27 Sep 2021

Hong Kong’s proposed listing rules for special purpose acquisition companies (SPACs) could give it extra firepower in the race to attract Chinese new economy companies and biotechnology firms, according to deal makers and market observers.

However, some safeguards designed to protect retail investors may make the city’s bourse less competitive with New York and Singapore in securing initial public offerings by SPACs themselves without some fine-tuning, they said.

The so-called blank-cheque companies have been one of the hottest fundraising trends globally over the past 18 months, raising US$126.4 billion this year and accounting for more than half of the capital raised in IPOs on American bourses, according to SPAC Analytics, a research firm focused on the investment vehicles.

The fervour over the investment vehicles – with most of the fundraising occurring in the US – prompted Singapore to change its listing rules this month and Hong Kong to propose its own listing changes, with a particular focus on protecting retail investors.

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

“For mainland companies, Hong Kong has long been their first choice for listing outside the domestic market as it is an international financial centre that shares the same language and culture with China,” said Louis Lau, a partner in the capital markets advisory group at KPMG China. “When Hong Kong allows SPACs to list here, it is natural that a majority of mainland companies will opt for a listing in Hong Kong, instead of going to the US.”

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Hong Kong’s planned SPAC rules could give it an edge in attracting Chinese tech, biotech firms

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;} SPACs have raised more than US$126 billion globally this year Planned listing changes in Hong Kong may require fine-tuning, deal makers say

SPACs have raised more than US$126 billion globally this year

Planned listing changes in Hong Kong may require fine-tuning, deal makers say