SINGAPORE EXCHANGE LIMITED (SGX:S68)
Singapore Exchange - New Rules For SPAC Listings
- SGX's latest announcement on the Special Purpose Acquisition Companies (SPAC) framework will allow companies to seek listing via SPAC on SGX, as long as it meets the criteria.
- SGX is the first Asian major exchange to introduce the listing framework – in an attempt to attract more technology companies. While we are encouraged by this initiative, impact to earnings is difficult to assess currently.
- Maintain NEUTRAL rating on SGX and target price of S$11.10, 9% upside.
New rules for SPAC listings.
- SGX announced earlier this month the new rules for SPAC listings on its Mainboard effective 3 Sep 2021, making it the first major Asian stock exchange to offer the listing framework.
8 key features to be met by SPAC listing
- SGX (SGX:S68) outlined eight key features to be met by any SPAC listing, which are as follows:
- Minimum market capitalisation of S$150m;
- De-SPAC must take place within 24 months of IPO (up to 12-month extension subject to conditions);
- Moratorium on Sponsors’ shares from IPO to de-SPAC, a 6-month moratorium after de-SPAC and for applicable resulting issuers, a further 6-month moratorium thereafter on 50% of shareholdings;
- Sponsors must subscribe to at least 2.5% to 3.5% of the IPO shares/units/warrants depending on the market capitalisation of the SPAC;
- De-SPAC can proceed if > 50% of independent directors approve the transaction and >50% of shareholders vote in support;
- Warrants issued to shareholders will be detachable and maximum percentage dilution to shareholders arising from the conversion of warrants issued at IPO is capped at 50%;
- All independent shareholders are entitled to redemption rights; and
- Sponsor’s promote limit of up to 20% of issued shares at IPO.
Our thoughts on SGX's rules for SPAC listings
- We welcome SGX’s latest initiative and effort in trying to capture the latest listing trend. The exchange will work with the Securities Investors Association (Singapore) to increase retail investors’ understanding of SPACs through collaborative efforts including the conduct of educational programmes.
- However, the impact to SGX’s earnings outlook is still difficult to assess at this juncture although it is reported that the exchange is in talks with Grab, Sea Ltd and PropertyGuru for potential listings on SGX. We leave our earnings and target price for SGX unchanged.
- See
Singapore Research
RHB Securities Research
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https://www.rhbinvest.com.sg/
2021-09-13
SGX Stock
Analyst Report
11.10
SAME
11.10
