First Hong Kong-listed SPAC has slow start in trading debut

Hong Kong

AQUILA Acquisition, the first special purpose acquisition company (SPAC) to list in Hong Kong, had a slow debut on Friday (Mar 18) as few investors are qualified to trade the shares.

The SPAC closed 3.2 per cent lower at HK$9.68 after a session marked by only a few trades. The firm backed by CMB International Asset Management and AAC Mgmt Holding raised about US$128 million in the initial public offering (IPO) with shares sold at HK$10 each, inaugurating rules for blank-cheque companies effective since January.

Transactions with blank-cheque companies in the Asian hub are restricted to professional investors, and there are only 29 approved SPAC exchange participants allowed to trade them,showed information in the Hong Kong Exchanges & Clearing's website. The timing is challenging for newcomers in Hong Kong, with pressures ranging from increasing interest rates to Russia's war in Ukraine and high volatility with Chinese stocks. Additionally, SPAC offerings globally have slowed down considerably after a flurry of listings last year as investor interest diminished, US regulatory scrutiny increased, and stock prices tumbled.

Aquila Acquisition's debut is being closely watched by 9 other blank-cheque firms working on offerings in the financial hub city.

Hong Kong's rules for SPACs are more stringent than those of other venues given past scandals involving shell companies. Issuers must respect a minimum fund-raising threshold of HK$1 billion (S$173 million), higher than in Singapore or New York. Additionally, individual investors are allowed to trade the shares in those hubs.

Aquila Acquisition will focus on an acquisition within "new economy" sectors, including green energy, life sciences and advanced technology and manufacturing in Asia, particularly in China, said its prospectus. BLOOMBERG