After Grab’s back door US listing, will SPACs take off in Hong Kong and Singapore?

Listings of special purpose acquisition companies are gaining momentum in both Asian financial hubs, injecting life into the bourses – but will the buzz last?

Hong Kong will appeal to SPACs from mainland China, while Singapore offers an entry point to the Asia-Pacific, though stricter regulations may turn off some investors

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A person uses the escalator at the Singapore Stock Exchange. Photo: Bloomberg

Published: 1:17pm, 22 Mar 2022Updated: 3:16pm, 22 Mar 2022

Last December, ride-hailing and delivery giant Grab made history with its back door listing on the Nasdaq stock exchange. It was the biggest US listing by a Southeast Asian firm and also the world’s largest special purpose acquisition company (SPAC) deal, valued at US$40 billion.

That evening, more than 200 investors, drivers and other employees gathered in a hotel ballroom in central Singapore to cheer the milestone as Grab expanded its global footprint.

The landmark listing came after Grab’s successful merger with blank-cheque company Altimeter Growth Corp, joining a list of headline SPAC deals in the past year. Others involved EV start-up Lucid Motors and SoFi Technologies, a financial services firm.

In Asia, SPAC listings are gaining a similar momentum. Three shell firms in January listed on the Singapore Stock Exchange (SGX) while Hong Kong has reportedly received 10 applicants so far. Among those in the latter group is HK Acquisition Corp, a SPAC led by Norman Chan Tak-lam, former chief executive of the Hong Kong Monetary Authority.

Hong Kong’s first SPAC, Aquila Acquisition, made its trading debut last week, with professional investors ploughing 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, the company said.

These listings and deals would inject some much-needed life in the Asian bourses and add depth and breadth to their offerings, analysts said. But whether the buzz will last is another question. While analysts were largely optimistic, they warned that the stricter rules in Singapore and Hong Kong as compared to the West could potentially stifle activity.