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Top Stock Highlights of the Week: Oversubscribed SPACs, OCBC and a Brand New China EV ETF

·4-min read

Here are some interesting stock updates for this week.

Special purpose acquisition companies (SPACs)

SPACs have finally arrived at our shores this week.

Vertex Technology Acquisition Corporation (SGX: VTA), or VTAC, and Pegasus Asia (SGX: PGU) made their trading debuts this week, capping off a flurry of applications to be the first few SPACs to list in Singapore.

VTAC’s IPO was met with an enthusiastic response from both institutional and retail investors.

Its retail offer of 600,000 units was approximately 36 times over-subscribed, attesting to strong demand from the public for this new asset class.

VTAC’s international placement was equally well-received, being 8.8 times subscribed.

Total gross proceeds raised amounted to S$200 million and units of VTAC closed up 1% on its first day of trading at S$5.05, after hitting as high as S$5.25 during the day.

VTAC’s chairman Chua Kee Lock has reiterated that the blank-cheque company’s work doesn’t end even after a merger and de-SPAC, but also involves doing its task well to convince investors to stay for the long term.

Pegasus Asia’s IPO also saw strong demand.

The SPAC’s public offer, also of 600,000 units, was around 7.8 times over-subscribed, and a total of S$170 million in gross proceeds was raised.

CEO Neil Parekh said that his team will immediately focus on seeking suitable targets for a merger cum de-SPAC.

He sees many companies with disruptive business models in the technology sector that could qualify as suitable de-SPAC candidates for Pegasus Asia.

OCBC Ltd (SGX: O39)

OCBC was in the news of late due to a sophisticated phishing scam.

A total of 470 customers of the bank had fallen prey to this devious scam, with total losses amounting to around S$8.5 million.

The victims received unsolicited SMSes that directed them to a fake OCBC website where they were told to key in their username and login passwords.

The scammers then proceeded to siphon money from the hapless victims’ accounts once their personal information was stolen.

After an internal investigation by the lender, it then announced that all customers who had lost their savings in the scam will receive “full goodwill payouts”.

CEO Helen Wong also apologised for taking longer than expected for these issues to be resolved as each case needed time to be individually validated.

OCBC will also carry out a thorough probe to identify areas where it was deficient and to implement remedial actions if needed.

This egregious case highlights the importance of the bank maintaining its trust and reputation with depositors.

A sum of S$8.5 million pales in comparison with the S$1.2 billion of profit that the bank chalked up during its recent fiscal 2021’s third quarter.

As financial institutions are built on a bedrock of trust, the move to fully compensate all the scam victims fully reflects well on management.

The bank will, however, need to relook its security processes to ensure that a repeat of such an incident does not occur again.

China Electric Vehicles and Future Mobility ETF (SGX: EVS)

For investors who wish to gain exposure to a fast-growing sector, the Singapore Exchange has just announced the listing of a new exchange-traded fund (ETF).

The NikkoAM-StraitsTrading MSCI China Electric Vehicles (EV) and Future Mobility (FM) ETF seeks to replicate the returns of the MSCI China All Shares IMI Future Mobility Top 50 Index.

The brand new ETF offers investors access to Chinese companies that draw revenues from energy storage technology, autonomous vehicles, and new transportation methods.

According to a report by Allied Market Research, the global EV industry is worth around US$250 billion currently and is projected to more than triple to US$800 billion by 2027.

China is the world’s leading EVFM market and Bloomberg estimates that by 2025, more than half of new global EV sales will come from the Middle Kingdom.

This ETF’s top holdings include Contemporary Amperex Technology (SHE: 300750), a battery manufacturer for EVs, and Xpeng Inc (NYSE: XPEV), a premium EV manufacturer.

Around two-thirds of the index is invested in China, with Hong Kong taking up an 18.5% weight and the US making up the remainder.

The ETF has a total expense ratio of just 0.7%, making it an affordable way to gain access to this cutting-edge sector with explosive growth potential.

What do real estate, Malaysia, Asia’s retail and healthcare have in common? They are a rich source of dividends! And in 2022, these 4 sectors look to be full of companies with healthy cash flows and dividends. If you want to own some of these stocks yourself, then grab a copy of our latest special report. Click here to download it for FREE.

Disclaimer: Royston Yang does not own shares in any of the companies mentioned.

The post Top Stock Highlights of the Week: Oversubscribed SPACs, OCBC and a Brand New China EV ETF appeared first on The Smart Investor.

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