Only quality SPACs are welcome: Hui

Finance | Victor Zhong and Bloomberg 18 Oct 2021

Hong Kong wants to only attract special purpose acquisition companies of quality, Secretary for Financial Services Christopher Hui Ching-yu said yesterday.

Elaborating on the proposal to allow bank-cheque companies to list in the city, which was revealed in Chief Executive Carrie Lam Cheng Yuet-ngor's 2021 Policy Address, Hui said quality would be the top priority.

In order to protect investors, the government is looking at limiting trading in SPACs to professionals and blocking mom-and-pop investors, he said in a radio show. Furthermore, the size of funds raised and the sponsors will also be regulated, Hui added.

Hui's comments come as Hong Kong's primary-listing market is going through a dry patch in what is normally the busiest time of the year.

Several potential billion-dollar initial public offerings ranging from supermarket owner WM Tech to health-care startup We Doctor have let their applications lapse in recent weeks as regulatory scrutiny and stock market weakness crimps listings. After a stellar first half, the value of IPOs dipped to just US$6.2 billion (HK$48.36 billion) in the third quarter - the lowest since the start of the pandemic and behind South Korea for the first time in four years. However, 2021 will still likely rank highly in terms of IPO proceeds thanks to the sheer volume of issuance in Hong Kong in the six months.

Meanwhile, online marketing service provider UJU Holdings has applied for a Hong Kong IPO with CMBC Capital as the sole sponsor.

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