Advertisement
Hong Kong joins global bourses in letting blank-cheque companies raise funds as SPACs get the nod for initial public offerings
- SPACs raised nearly US$81 billion last year and US$139 billion this year as of October, according to Refinitiv’s data
- Most SPACs are listed in the US, but Britain, Malaysia and Singapore have changed their listing rules to compete for such listings
Reading Time:3 minutes
Why you can trust SCMP
Hong Kong’s stock market operator will allow special purpose acquisition companies (SPACs) to list starting in January, joining global bourses from New York to Singapore in opening another fundraising avenue for start-ups.
Advertisement
SPACs must raise at least HK$1 billion (US$128 million) to qualify for a listing in the city, according to a statement by Hong Kong Exchanges and Clearing Limited (HKEX), the operator of the world’s third-largest capital market.
Since early 2020, SPACs have been the hottest fundraising trend for start-ups, raising US$81 billion last year and US$139 billion as of October 28 this year, according to Refinitiv’s data. They enable companies that would otherwise not qualify for a stock market listing to raise funds. Many firms from Hong Kong and China have taken advantage in the last couple of years.
Hong Kong fast-tracked its approval for SPAC listings after the government signalled its support. Financial Secretary Paul Chan Mo-po in March urged the HKEX to look into SPAC listings after several local tycoons listed their blank-cheque companies in the US.
The HKEX announcement, coming after a 45-day public consultation period, would clear the way for so-called blank cheque companies to raise capital from investors, with the purpose of buying assets – typically high-potential start-ups – within a limited period.
Advertisement
Hong Kong is a latecomer to the SPAC frenzy. Singapore’s stock exchange gave its green light to SPAC listings on September 3, after New York Stock Exchange has long championed it.
Advertisement