Singapore special purpose acquisition companies (SPACs), crypto developments, and tie-ins with Chinese exchanges indicate a new direction

By Asia Investment Research 

The RCEP (Regional Comprehensive Economic Partnership) is a free trade area that includes China, all ten ASEAN nations, Japan, South Korea, Australia, and New Zealand. Collectively, this includes 30 percent of the world’s population and 30 percent of its GDP. The agreement came into effect on January 1, this year.

In this article, we highlight key findings concerning Singapore, showcasing the impact of the RCEP on its inbound investments as global businesses react to the creation of this huge free trade area. 

There were in fact extraordinary developments in the country during Q4 2021, prior to the January RCEP launch. Singapore introduced a number of actual and planned changes to its stock exchange, saw numerous leading financial services players form hubs, the formation of a regional COVID vaccine JV launched, and its regulators tested in the crypto segment. 

Relative to Singapore, none of the 15 investments/acquisitions made during Q4 2021 were over US$50 million, although four were valued at US$40 million or more (averaging US$14.8 million). Eight of the 15 investments in Singapore were TMT / crypto/ blockchain. There were three in biotech/healthcare (Sinopharm amount was not disclosed), one each in EdTech, transportation, industrial, and consumer. 

Historically, the Singapore Stock Exchange (SGX) has been dominated by banking, property, and transportation companies. It has also had difficulties in attracting new listings. By December 2021, there were only eight new equity offerings, totaling circa US$1 billion, the largest of which was a US$600 million REIT. It has struggled to attract high-profile tech IPOs, which have chosen other exchanges to list. 

Meanwhile, several China and Southeast Asian sponsors of SPACs and their target companies have largely ignored the SGX, instead of listing on US stock exchanges, which have seen a huge growth in this form of IPO. One example is Vertex, a shareholder of Singapore tech unicorn Grab, which in December listed in the US via a SPAC merger in one of 2021’s highest-profile IPOs of a Southeast Asian start-up. 

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This article was first published by AseanBriefing which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, India, and Russia. Readers may write to [email protected]

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