SEOUL, June 29 (Yonhap) — Newly listed stocks enjoyed substantial gains in the first half this year, fueling an investor rush amid volatile market trends, data showed Sunday.
A total of 12 companies made debuts on the main KOSPI and the tech-laden KOSDAQ markets, nine of which far exceeded their IPO prices, according to the data from the bourse operator Korea Exchange (KRX).
As of Friday, these firms’ stock price hikes averaged as high as 52.4 percent.
Among them, Leading Edge Technology Co. Ltd. closed Friday at 20,300 won on the KOSDAQ market, up 160.3 percent from the 7,800 won IPO price. The OLED-related equipment maker was listed on June 22.
LED chipmaker Seoul Viosys soared 144 percent, with Nanotech company LEMON and biotech firm SCM Lifescience surging 120.8 percent and 70.9 percent, respectively. Marketing service provider PlayD shot up 50.6 percent.
Experts largely attributed the IPO stock rally to inflows of cash from retail investors.
SK Biopharmaceuticals, the bio unit of SK Group, offered 3.9 million IPO shares from June 23-24. Investors deposited 31 trillion won to get the stocks, the largest amount in the country’s IPO history.
Financial experts said the IPO stock rush may continue down the road thanks to upcoming IPOs by big-name firms, such as Big Hit Entertainment, the label of K-pop superstars BTS.
Ample liquidity circulating in the market, combined with investors seeking higher returns amid the low-interest, low-growth economy, may help boost IPO stocks.
Last month, the Bank of Korea (BOK) cut the key interest rate to a record low of 0.5 percent, citing the new coronavirus’ economic fallout. It also sharply cut South Korea’s growth outlook in 2020 to 0.2 percent contraction this year, compared with a 2.1 percent expansion forecast in February.
SK securities analyst Na Seung-doo expected the IPO stock rush to stretch throughout the rest of the year.
Na said, “We are seeing more inflows of cash to the stock market amid the strong regulations on real estate.”
“The previous investment-related market fiascos also seem to have increased demand for direct investment,” he added.