The COVID-19 pandemic has created an exciting investment environment. Despite the plunge in stock markets globally in March 2020 as panic spread, they quickly rebounded as a result of the increased financial liquidity created as governments splurging cash into economies worldwide to deal with the pandemic and help them afloat in the face of lockdowns and reduced consumer activity. Combined with the low-interest rate conditions, the stock market is now in a feeding frenzy. In the US, the trend has led to a boom of SPACs – or special purpose acquisition companies, that are betting mainly on technology companies. Indeed, one consequence of the pandemic is that it has been a catalyst for greater digital adoption and has changed people's habits, creating a brighter outlook for the sector as a whole.
Asia Partners' 2021 Internet Report predicts there will be 20+ billion-dollar value tech companies from Southeast Asia by 2029, and half of these will pursue IPOs over the next decade. The SPAC boom also lures Asian and Indonesian tech companies to seek public funds on Wallstreet and the Nasdaq. CNBC quoted Dealogic's data that showed the number of Asia-focused SPAC companies grew from zero in 2016 to eight in 2020, raising about $1.44 billion. Only four Asia-targeted SPACs were completed last year. However, in the first three months of 2021, there have already been six such companies that have collectively raised $2.7 billion. In Indonesia, travel-tech company Traveloka is one that has announced its intention to use a SPAC for its IPO plans this year. Another company rumored to be planning to go along the same path is ecommerce giant Tokopedia. While the SPAC frenzy seems to minimize the chances for the Indonesia Stock Exchange (IDX) to attract major tech companies to do IPOs in the country, veteran tech investor and commissioner at the IDX, Pandu Sjahrir, says otherwise. Given the bourse performance and track record, We have to be confident, Pandu says. Pandu stands in a unique yet significant stance to help make the IDX attractive for unicorns, given his experience and positions in many institutions.
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