Singapore’s stock exchange is hoping to become the first in Asia to join the Spacs craze © Bloomberg

Hello everyone, James here. The vogue for Spacs, a stock market phenomenon that has galvanised Wall Street, could be coming to Asia (The Big Story). If it does, we could see a surge of local tech start-ups getting public listings in Singapore. In other stories this week, don’t miss the US-China Zoom spy thriller and Facebook’s WhatsApp travails in the region. (Mercedes’ top 10). And Jack Ma appears to have resurfaced.

The Big Story — Exclusive

Singapore’s stock exchange is looking to cash in on the global vogue for listing blank-cheque companies, according to this exclusive in the Financial Times. The exchange’s interest in Spacs, which have taken Wall Street by storm, is driven by its ambition to be the regional hub for technology start-ups.

Spacs, or special purpose acquisition companies, use the proceeds from a public listing to hunt for private companies to acquire. In Asia’s case, this could smooth the route for many fast-growing tech start-ups to go public.

Key implications: The Singapore exchange said it would begin a formal consultation within two months into allowing Spacs to list in the city-state. However, previous initiatives to lure tech companies to list locally have been unsuccessful.

Bankers said SGX would be well positioned to attract Asia-based and regionally focused acquisition vehicles that have listed in the US, such as Bridgetown Holdings, a Spac backed by Hong Kong businessman Richard Li and Silicon Valley investor Peter Thiel.

Bridgetown raised $595m in a US IPO in October, making it the biggest Spac focused on south-east Asia. Bridgetown 2, which launched this month, is seeking to raise $200m to target additional Asian companies.

Upshot: Singapore would be the first exchange in Asia to join the Spacs craze. In the US, the asset class raised a record of almost $80bn in 2020. There are health warnings on Spacs, though.

Mercedes’ top 10

  1. Tinker, tailor, soldier . . . Zoom spy? The gripping case of Chinese surveillance of Zoom users is a must read from the FT’s Beijing bureau chief Tom Mitchell.

  2. Facebook was already grappling with a WhatsApp exodus in the region over privacy concerns. In another huge setback, India has asked the company to cancel the planned change to its data-sharing policy.

  3. Taiwan’s TSMC has boosted its capital spending to a record $28bn, making it even harder for rival chipmakers Samsung and SMIC to catch up.

  4. Staying with SMIC, the FT delved into the extraordinary boardroom drama playing out at China’s largest chipmaker.

  5. Who is winning the battle of the robots? Japan and Europe — but China is catching up.

  6. Meanwhile, China’s hope of challenging the dominance of Boeing and Airbus was dealt a blow by the Trump administration.

  7. Nice piece here on the global chip shortage. Semiconductor companies are struggling to meet increased demand from makers of everything from cars to electronics.

  8. On the flip side — that demand is helping fuel a rush by investors into semiconductor stocks listed in South Korea, Taiwan and Japan.

  9. In case you missed it, we had a scoop on how international investors in Ant Group have been left in limbo by the axed IPO.

  10. Smart masks and social distancing robots? CES served up some curious gadgets to help users manage their lives during the pandemic.

When sages speak

  • This is a useful bumper report by Merics, a Berlin-based think-tank, and the EU Chamber of Commerce in China for companies to assess the damage inflicted by the US-China tech war. The dynamics of decoupling are likely to continue under the Biden administration, creating “patchwork globalisation”.

  • For readers seeking a guide to how the US-China rivalry may play out under the new presidency, this piece by Evan Feigenbaum at the Carnegie Endowment for International Peace is perceptive and nuanced.

Our take

“Deep learning” is a somewhat misleading label applied to one of the branches of artificial intelligence, writes Ken Koyanagi, editor-at-large at Nikkei Asia. The word “deep” refers to the several algorithmic layers that make up this neural network. But it has nothing to do with the depth of understanding.

A new deep learning-based natural language generator dubbed GPT-3 caused a sensation when it debuted last May, with its capability to compose sentences indistinguishable from human written ones. It created some blog and chat posts that many people thought were composed by humans.

But Gary Marcus of New York University, a renowned cognitive scientist, revealed in August that GPT-3 can also err by producing sentences that make no sense in a given context. He declared in the MIT Technology Review that GPT-3 “has no idea what it’s talking about”.

Trained on hundreds of billions of words on the web, GPT-3 basically guesses which word sequences it “knows” that would best fit into a given query or context. But it cannot be certain about whether grape juice is a common beverage or a poison, according to Mr Marcus’s study.

Now, a Singaporean AI start-up — which uses an approach that does not rely on “deep learning” — is gaining popularity by outperforming “deep learning” competitors such as IBM’s Watson. The start-up, called Taiger, has been deployed in processing documents such as contracts and powers of attorney. Its edge comes from superior powers of comprehension gained by working out the meaning of a word in each context using machine-readable human-knowledge libraries.

Taiger’s growth indicates that businesses on the ground are waking up to the reality of deep learning’s weaknesses. In fact, IBM itself is rapidly developing what it calls “neurosymbolic AI” — an attempt to combine human knowledge and deep learning neural networks.

Spotlight

Lee Jae-yong (pictured), Samsung’s vice-chairman and top decision maker, was taken to prison this week after being sentenced to two-and-half years in jail — a landmark in the life of South Korea’s richest man and the country’s most important company.

Seoul’s high court on Monday sentenced Lee following a retrial, though prosecutors had sought a nine-year term. The billionaire, who was immediately detained after the ruling, will only spend 18 months behind bars, as he previously spent a year in prison before being released by an appeals court in 2018.

The final ruling, which followed years of legal wrangling, is a setback for Samsung, whose electronics unit is the world’s biggest manufacturer of computer chips, smartphones and electronic displays.

Art of the deal

There’s a new deal du jour playing out in Indonesia’s tech sector: buying banks. Indonesian ride-hailing and payments “super app” Gojek late last year paid around $160m to increase its stake in Bank Jago, its biggest investment in financial services yet. Now Nasdaq-listed Sea, which is south-east Asia’s most valuable company, has acquired Indonesia’s Bank Kesejahteraan Ekonomi. Sea has ecommerce and gaming businesses, but it has also broken into financial services with the launch of SeaMoney. Bank BKE, set up in 1991, is a small lender with Rp3.7tn ($261m) in assets.

The trend reflects how technology companies in the region, be they in ecommerce, ride-hailing or gaming, are all converging around the lucrative opportunity to offer financial services to their millions of customers. Indonesia is home to the world’s fourth-largest unbanked population and is centre stage for internet companies vying for a share of digital banking. They are offering consumers everything from lending to insurance to wealth management.

#techAsia suspects there could be more to come. Singapore-headquartered Grab last week announced a $300m fundraising by its financial unit. The start-up, which is also doubling down on Indonesia, plans to use the funds for M&A activity, among other things.

Smart data

Europe leads in 'greenness' of Covid stimulus

Vivid Economics, a London-based consultancy, has examined the green recovery stimulus policies introduced by governments around the world to cope with the Covid-19 pandemic and found many of those in Asia wanting.

Its Green Stimulus Index assigned negative scores to the US, China, Japan and South Korea and positive ones to Britain, France and Germany. Japan received a negative score for factors such as reduced taxes on certain types of vehicles. China also got a negative score because the country has streamlined permits for coal mining.

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