Has Asia missed the blank-cheque boat? The SPACs frenzy is cooling before Hong Kong, Singapore even get off the starting blocks

SPAC fundraising in April slowed to its lowest level in nearly a year after eye-popping capital raising in the first quarter raised US regulators’ concerns

Appetite for SPACs remains high among Asian investors, target companies despite fundraising pause, advisers, sponsors say

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Published: 10:37am, 8 May 2021Updated: 11:51am, 8 May 2021

With tens of billions of dollars in new listings at stake, Hong Kong’s Financial Secretary Paul Chan Mo-po directed the city’s securities regulator and bourse operator in March to study the feasibility for amending rules to let special purpose acquisition companies (SPACs) raise funds in the city.

Singapore expects to open its arms to SPACs by midyear, and excited deal advisers are fielding enquiries from hoards of Asian companies looking for a faster and easier way to raise capital from investors in the public market.

That momentum may come to a grinding halt after SPAC fundraising slowed to just US$3.6 billion in April, the lowest amount in a month since June last year, according to financial data provider Refinitiv.

Calls for a watered-down SPAC framework from traditionally risk-averse regulators in Hong Kong and Singapore are gaining a wider audience. The conservative camp is keen to enact rules that weed out the weakest companies seeking a public listing and offer greater protection to retail investors.