The value of shares issued through initial public offerings in 2018 is the smallest in five years, South Korea’s bourse operator said Sunday.
According to the Korea Exchange, the total value of stocks offered by newly listed companies, including those that will be issued by the end of the year, has been estimated at slightly more than 2.75 trillion won ($2.44 billion). That is equal to 34.5 percent of 7.97 trillion won worth of stocks that were floated last year and the lowest amount tallied since 2014.
It said shares issued on the main KOSPI market nosedived 84 percent on-year to just 713.6 billion won, while over-the-counter, tech-centric KOSDAQ index reported a 42.2 percent drop in newly offered shares that stands at around 2.03 trillion won.
The stock market operator said the main reason for the poor showing this year is the lack of big name companies going public.
This is in contrast to 2017 when Netmarble Corp. and Orange Life Insurance, which were listed on the KOSPI and Celltrion Healthcare Co., started trading on the KOSDAQ market.
“Last year there were more than 10 firms whose newly issued shares exceeded 100 billion won in value, which is not the case this year,” the KRX pointed out.
It said many companies that had moved to be listed on the country’s stock markets, delayed making the move in light on weak conditions and mounting uncertainties. There have even been cases like Hyundai Oilbank Co. that originally planned an IPO in August, but had to postpone as state regulators scrutinized its accounting records.
Others like SK lubricants Co. and CJ CGV all opted not to issue shares for trading or delayed taking such a step for the time being.
On the other hand, due to efforts by the government and KRX to help small venture startups get listed on the bourse, a total of 97 medium-sized companies have or will be traded for the first time this year, up from 82 last year. Of these seven have been listed on the KOSPI
Among KOSPI listed companies, Aekyung Industrial Co. has done well, while T’way Air Co. did the worst. For companies that started trading on the KOSDAQ market, 38 have seen their share prices rise.
“IPO numbers are not that good for this year, although there has been an increase in companies being traded on the KOSDAQ for the first time,” a KRX insider said. He said efforts will be made in the new year to get big companies to push forward IPOs that can benefit the market as a whole. (Yonhap)