Singapore’s first SPAC VTAC makes market debut, closes 1% higher
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SINGAPORE — Singapore’s first blank check company started trading on the country’s stock exchange on Thursday afternoon, four months after the bourse launched new rules allowing special purpose acquisition companies (SPACs) to list.
Vertex Technology Acquisition Corporation is sponsored and managed by Vertex Venture. Vertex Venture is a subsidiary of Temasek Holdings, a state-investor.
Initial public offering by the SPAC of 11.8 Million Units was priced at $5 Singapore Dollars. 36 times as many people signed up for the 600,000 unit retail tranche.
Stock opened at $5.25 Singapore Dollars, but it gained 1% to close at $5.05 Singapore Dollars.
Investors included Fullerton Fund Management and Venezio Investments contributed $200 million Singapore Dollars (more than $148 Million) to the company.
VTAC plans to purchase at least one company within the first two years after its initial listing. It will be focusing on cybersecurity and artificial intelligence, as well as fintech.
Popular recently, SPACs were established to raise capital for investors to purchase operating businesses. The SPACs raise funds in an initial public offering, and then merge with a private business to make the company publicly. This allows them to avoid the long and tedious IPO procedures.
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Ringo Choi (EY Asia-Pacific IPO lead) said that Singapore might be able draw more companies to its stock markets through its push for SPACs.
He said that while companies may consider listing in Hong Kong, Malaysia, or any other ASEAN country, they would prefer this Singapore SPAC-IPO.
He pointed out that the blank check company was heavily oversubscribed, and the firms may be able to price shares higher in Singapore.
Choi indicated that the move could help boost liquidity and IPO numbers in Singapore. Choi stated that Singapore authorities are eager to open new avenues to make it a more competitive financial hub, with large trading volumes.
Singapore was the first Asian country to accept such listings.
Michael Marquardt is the CEO of IQ-EQ Asia. He said that Singapore’s SPAC approach was conservative, as it has only recently relaxed its rules.
He said that the strategy had given investors the confidence to list new SPACs. SPACs’ long-term success will depend on their ability to attract inflows into a safe capital market.
Marquardt also forecasted that SPACs in Asia will begin to list within the financial hubs.
He stated that “given Hong Kong’s changes in listing regime, these rule revisions across both countries will help to stimulate SPAC activity throughout Asia.”
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