This article only represents the author's own views.
Blame it on the market. Or perhaps special purpose acquisition companies (SPACs) were just a tad ahead of their time for Hong Kong investors. Whatever the case, SPACs, the cash-filled publicly traded shells used as vessels to take real companies public, have sputtered since their introduction in Hong Kong at the start of this year. In fact, the entire IPO market, which is closely tied to SPACs, has struggled this year amid a slowing global economy. Only 27 companies went public in Hong Kong in the first half of the year, raising a collective HK$18.1 billion ($2.3 billion), down over 90% from a year earlier and the lowest amount in a decade. Many might argue that sluggish performance has also sapped local interest in SPACs, which were just allowed in the market at the start of this year.
The Hong Kong Stock Exchange introduced its new SPAC program after the backdoor listing mechanism soared to global popularity in recent years. It made the move to maintain its spot as a regional fundraising hub, and also to avoid being outmaneuvered by regional rival Singapore. The program allows SPACs to go public and later conduct “reverse mergers” whose ultimate purpose is to take real private companies public.