Scott Murdoch and Donny Kwok

HONG KONG (Reuters – Aquila Acquisition Corp shares dropped on Friday after the Hong Kong Stock Exchange discussed what they call “a new route for market”.

On its first trading day, the stock fell to HK$9.70. This is a decrease of 3% from the offer of HK$10 per share. There was only one trade in the session. Refinitiv data revealed that there were two additional cross trades.

Hong Kong regulators approved SPAC listing in January. Nine additional SPACs filed filings since then to continue Aquila’s debut in which it raised less than $130 million.

Aquila shares saw a quiet day amid market restrictions and unfamiliarity regarding SPACs.

Professional investors may trade these shares. However, they will need to show their broker that they have met the requirements of regulators for limiting SPAC share sales and buying.

Participants in the market said that Hong Kong hoped investors from China would come to Hong Kong to list SPACs. SPACs are private investment firms that raise capital to acquire firms. They can then be taken public with no traditional Initial Public Offering (IPO).

After a spike in U.S. ‘blank-cheque’ firms listing, Singapore became Asia’s first major market that allowed SPACs trade. However, many of these U.S. companies are trading below water which is tempering global investors’ desire for such deals.

Hong Kong Exchanges and Clearing Ltd. (HKEX), welcomed the SPAC listing to the main exchange board.

Nicolas Aguzin, HKEX chief executive officer said that the new listing route offers issuers an additional market and diversifies their offering.

Aquila stated in filings that it raised HK$1billion ($128m) through the sale of 100 million Class A shares for HK$10 each. The offering also contained 50.03 million warrants. The company stated it plans to seek out deals between companies in sectors like green energy, the new economy.

The filings reveal that 99 investors invested in Aquila, SPAC. 40 were professional institutional investors.

Steven Leung from UOB Kay Hian’s sales department stated, “It is brand new and it is only a shell.” The shares did not trade.

Investors may need to be patient while they adjust and SPAC sentiment heats up. It is not possible for retail investors to jump right in as with other stocks.

Stockholders who are not retail investors can’t buy SPAC stock until the company acquires it. The reduction in the trading options for the shares means that fewer people will be able to trade them.

Reuters reports that Chinese investment banks regulated in China by the China Securities and Regulatory Commissions have been prohibited from being SPAC promoters for Hong Kong.

($1 = 7.8172 Hong Kong dollars)