Singapore Exchange's SPAC Rules Seen Giving Market Much-Needed Boost

Singapore Exchange's new rules for special purpose acquisition companies (SPACs) are likely to help it attract regional funds and fast-growing firms, as it seeks to revitalise a staid market for equity listings, market participants said, Reuters reported. Some of them expect Southeast Asian startups, especially from the tech sector, to take advantage of SGX becoming the first Asian bourse to allow SPAC listings since the investment frenzy in SPACs started in the United States last year, although the interest is peaking there. SPACs raise money on stock markets to buy private companies, giving those businesses a quick and cheap route to a listing. "As long term investors in building companies, we are confident this is a useful tool to have in our quiver," said Loke Wai San, co-founder and managing director at Novo Tellus Capital Partners, a Southeast Asian industrial-technology focussed buyout fund. Loke said Novo Tellus was optimistic of listing a SPAC within six months and had been studying potential targets as part of a so-called deSPAC process. SGX's rules, which come into effect from Friday, follow an initial proposal it issued in late March that had stricter rules than U.S. markets. SGX has now halved the minimum market capitalisation for SPACs to S$150 million ($112 million), and allowed warrants to be detachable from underlying shares - a move seen as making SPAC investments potentially more attractive. Read more.