Singapore Exchange (SGX) has added Cantor Fitzgerald as an accredited issue manager for SGX Mainboard listings, citing the investment bank’s expertise with SPACs, or special purpose acquisition companies.
As an accredited issue manager, Cantor Fitzgerald will be qualified to advise companies seeking to list on SGX’s Mainboard, the exchange operator said in a filing to SGX Wednesday.
Mohamed Nasser Ismail, head of equity capital markets at SGX, said the move was timely as the Singapore Exchange was preparing to list its first SPAC soon. A SPAC is essentially a “blank check” company, which raises funds and lists on a public market and then finds businesses to acquire and take public.
“Given Cantor’s expertise in SPACs, we will work closely with the firm to offer new fundraising pathways for fast growing companies which are looking to tap on the opportunities provided by Singapore’s capital markets,” Ismail said in the statement.
Mark Kaplan, global chief operating officer at Cantor Fitzgerald, said the investment bank saw “tremendous opportunities” in Singapore as a regional initial public offering (IPO) and SPAC hub.
“As a global investment bank, Cantor will endeavour to bring our international expertise, including in technology, healthcare, and biotech to bring high quality sponsors and investors to the Singapore and regional market,” Kaplan said in the statement.
“Cantor will raise capital via its extensive global network through innovative and efficient solutions while also tapping Singapore’s dynamic capital markets,” he said. “This development, along with the recent hiring of industry veteran Nilesh Navlakha as Asian head of equities based in Singapore, is another step in building Cantor’s equities franchise in Singapore and Asia.”
DBS: SGX’s SPAC framework to attract capital
In a report last week, DBS Group Research said SGX, as the first major Asian stock exchange to offer SPAC listings with retail participation, has set up stronger safeguards for shareholders.
“Learning from SPAC development and performance in other exchanges, additional safeguards are introduced in SGX’s framework to ensure stronger alignment of sponsors with the SPAC’s public shareholders,” DBS said in the note.
“SGX’s SPAC framework stands out from other bourses, with its enhanced investor protection mechanisms (which are less prevalent in other markets), without compromising on the flexibility and competitiveness of its framework,” the note said.
The safeguards include focusing on sponsor qualifications, such as technical and commercial experience, and their ability to access high-quality deals, the note said, pointing to examples in the U.S. market where celebrities and athletes have sponsored SPACs, spurring concerns about sponsor quality.
SGX will also have a minimum equity participation requirement for sponsors of 2.5 percent to 3.5 percent of IPO shares/units/warrants to ensure they have “skin in the game,” DBS noted.
“We believe companies, sponsors and investors are poised to benefit from SGX’s SPAC framework; The framework will be able to aid in attracting global capital keen on long-term exposure to ASEAN/Asian economic growth, whilst providing opportunities for investing in attractive high growth private equity to Singapore’s public market,” DBS said.