SPAC Slowdown Tests Asia’s Fledgling Market for Blank-Check Firms

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Two of Asia’s financial hubs aimed to reinvent the SPAC. So far, it is proving slow going, the Wall Street Journal reported. Exchanges in Hong Kong and Singapore have always said they aim for quality not quantity with their rules for blank-check companies, touting better investor protection than in the U.S. But as the U.S. SPAC business has lost momentum, global banks and international investors have grown more cautious about their involvement in these vehicles. And market turmoil brought on by the Ukraine war and the Federal Reserve’s interest-rate increases has made it harder to sell new listings to investors. SPACs, or special-purpose acquisition companies, are cash shells that first raise money from public investors and list on an exchange, and then hunt for private companies to merge with. Nine months after SPACs were allowed in Singapore, just three such listings have taken place. In Hong Kong, where rules took effect in January, only two have gone public. The second, Vision Deal HK Acquisition Corp. , listed earlier this month. That is a far cry from the U.S., where even as investor appetite has cooled, nearly 70 SPACs have listed this year, according to data from industry tracker SPACInsider. Read more. (Subscription required.)