SPACs underwhelm in Hong Kong and Singapore in first year, as listings lapse and applications peter out

After an initial flurry, applications for special-purpose acquisition companies have dried up in both Hong Kong and Singapore

Experts nonetheless expect the mechanism to play a role over time as broader market conditions improve and successful SPACs raise confidence

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Office workers walk during lunch time at Raffles Place in Singapore’s financial business district on August 22, 2022. The city has seen only three SPAC listings since allowing the mechanism in late 2021. Photo: AFP

Published: 2:05pm, 12 Sep 2022

Special-purpose acquisition companies (SPACs) have received a cooler than expected response in both Hong Kong and Singapore, with some launches from early in the year fizzling and few new applications emerging in recent months.

Hong Kong, where SPACs launched in December 2021, has seen no new filings in the past two-and-a-half months. The most recent prospectus, that of TechStar Acquisition, was filed on June 24, according to the Hong Kong stock exchange website. Previously, the market saw four applications in January, four in February, two in March, one in April and none in May.

In Singapore, no new SPACs have appeared since three such listings emerged in January, after the SPAC listing regime took effect in September 2021.

SPACs are shell companies created to raise financial war chests and buy assets within a limited period of time, usually 18 months to 24 months.

People relax at Tsim Sha Tsui Public Pier in Hong Kong on August 25, 2022. No new SPAC applications have been filed in the city in the last two and a half months. Photo: SCMP / K. Y. Cheng

Neither Hong Kong nor Singapore has seen a successful de-SPAC – when the selected company merges with the listed SPAC – this year.

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