KUALA LUMPUR: The United States presents a compelling market for Malaysian firms interested in SPACs or special purpose acquisition companies due to attractive returns, said ARC Group.

President Sergio Camarero said the group is mandated by various companies, including those in logistics, healthcare, and financial services to acquire local Malaysian companies as a way to invest and enter the market.

“While SPAC activity in Malaysia’s exchange has been lacklustre, Malaysian companies that have ventured into the US market have achieved success,“ he told Bernama.

There were 15 Malaysian-sponsored SPAC initial public offerings on Nasdaq between 2021 and 2023.

These companies included Canna-Global Acquisition Corp (with a SPAC size of US$230 million or about RM1.08 billion) – making it the largest Malaysian SPAC), Data Knights Acquisition Corp (US$115 million), Energem Corp (US$115 million), Liberty Resources Acquisition Corp (US$115 million), and PHP Ventures Acquisition Corp (US$57.5 million).

Camarero said Malaysian companies have received the same interest as US companies because investors are looking at emerging markets to find more attractive returns. Therefore, he added, local companies should seize the opportunity to access US capital markets.

Camarero also highlighted the potential benefits for Malaysian companies amid the growing divide between the US and China. “With the geopolitical trade war between the US and China, more US companies and investors are looking for alternative markets and Malaysia is well positioned,“ he said.

ARC Group is an award-winning global financial institution that provides a full range of capital market, merger and acquisition (M&A) and financial consulting services.

Malaysia is currently the second largest market for the group, accounting for 30% of its business.

The framework for the listing of SPACs in Malaysia was first introduced in 2009 to promote private equity activities, spur corporate transformation, and encourage M&A – which intended to enhance the depth, breadth, and competitiveness of the domestic capital market.

In 2021, the Securities Commission Malaysia revised the equity guidelines in the enhanced SPAC framework to facilitate greater access to fundraising in the country as part of its ongoing efforts to promote the development of the capital market.