Boosting local investments

THIS WEEK'S TOPIC: Do you think special purpose acquisition companies (SPACs) will give a fillip to Singapore's equity market?

Lawrence Loh Director, Centre for Governance and Sustainability NUS Business School Singapore's equity market has to be progressive to stay viable in the new global setting of increasing sophistication in the investment space. Stock exchanges, in particular, cannot continue to be one-trick ponies in sticking to regular equities sourced through the traditional initial public offering (IPO) route. With the necessary safeguards, SPACs will add to the breadth and depth of investment options for Singapore's equity market to stay relevant in a changing world. SPACs carry risks for all stakeholders and this can be addressed by adequate regulations and provisions. The adage is most true: nothing ventured, nothing gained. The greatest risk is to do nothing. The last thing we want is to let the world go by.

Cheung Pui Yuen Chief Executive Officer Deloitte Singapore For SPACs, quality comes before quantity, and we observed that the first 3 Singapore Exchange (SGX)-listed SPACs are high-quality sponsors with proven track records. SGX's SPAC market is gaining traction, judging from the high over-subscription rate thus far. The first few SPACs have demonstrated commitment by having 100 per cent of the gross IPO proceeds in escrow, pending a successful de-SPAC. It will boost market confidence if they perform well, dependent on how soon they find a target and their performance after the de-SPAC. Bringing in quality targets on a timely basis is key to the development of Singapore's SPACs scene and will boost the equity market.