Singapore’s first SPAC VTAC debuts and closes up 1%

SINGAPORE — Singapore’s first blank check company began trading on the country’s stock exchange on Thursday afternoon, four months after the exchange launched new rules allowing special purpose acquisition companies (SPACs) to s ‘to register.

Vertex Technology Acquisition Corporation (VTAC) is sponsored by Vertex Venture, a wholly owned subsidiary of public investor Temasek Holdings.

SPAC’s initial public offering of 11.8 million units had an offering price of 5 Singapore dollars. The retail tranche of 600,000 shares was subscribed 36 times.

The stock opened at a high of S$5.25 before paring gains to close at S$5.05, up 1% from its offer price.

The company has raised 200 million Singapore dollars (over $148 million) from investors including other Temasek affiliates, Venezio Investments and Fullerton Fund Management.

VTAC will seek to acquire at least one company within two years of its listing date and will focus on areas such as cybersecurity, artificial intelligence and fintech.

SPACs have become very popular recently and are created solely to raise capital from investors to acquire one or more operating businesses. They raise money in an initial public offering and use the money to merge with a private company, to take the company public and bypass traditional IPO processes which can be lengthy.

Make an offer to attract more business

Singapore may be able to attract companies to its stock market with its push for SPACs, said Ringo Choi, EY’s Asia Pacific IPO manager.

“Companies may be considering listing in Hong Kong or, for example, Malaysia or other ASEAN countries, but they will prefer to go for this IPO of SPAC in Singapore if they have the ‘opportunity,’ he told CNBC’s “Street Signs Asia” on Thursday.

He pointed out that the blank check company was heavily oversubscribed and that companies might be able to price the shares higher in Singapore.

That could be a boost for the city-state, which has seen average IPO sizes shrink and liquidity dwindle in recent years, Choi said. Authorities want Singapore to be a competitive financial hub with high trading volumes and were eager to introduce new channels, he said.

Singapore is one of the first markets in Asia to allow such listings.

Michael Marquardt, CEO of investor services firm IQ-EQ Asia, called Singapore’s approach to SPACs conservative as it only relaxed its regulations last year.

“This strategy has given investors the confidence they need to trigger new SPAC quotes,” he said in an email. The commitment to creating a safe and regulated capital market environment will benefit SPACs in the long run by attracting more inflows, he said.

Marquardt also predicted that more SPACs would start registering in Asian financial centers.

“Given the changes to Hong Kong’s listing regime that took effect earlier this year, these rule revisions in both jurisdictions will serve to encourage SPAC activity in Asia,” he said. declared.

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