Ammunition is piling up as investors prepare for South Korea’s 2022 IPO calendar filled with successful and up-and-coming platform names, starting with the $10.8 billion mega debut from LG Energy Solutions.
The balance of demand deposits, or money placed for immediate withdrawal, at the country’s five major commercial banks stood at 659.7 trillion won ($551 million) at the end of December, adding 10 trillion won from the previous month and up to 77.6 trillion won from a year ago.
Much of the money could be waiting for successful IPOs this year.
LG Energy Solution would set the bar high with a historic nearly $11 billion IPO at the highest price of its forecast for Kospi listing on Jan. 27. like CJ Olive Young, SSG.com and Kurly.
The expected debut of the market heavyweights should rekindle investor interest in public funds, which have seen massive capital outflows since late last year.
According to Korean financial market tracker FnGuide Inc. on Tuesday, there has been a net outflow of 941.7 billion won ($785.79 million) in the past three months with an ebb of 236 billion won in one single month.
The end-of-year hiatus contrasts with the buzz of the beginning of the year.
More than 3 trillion won had been poured into public offering funds by June last year, when the annual total reached 3.4 trillion won, far exceeding the cumulative 1.8 trillion won for the public offering over the past five years. The average return of 144 publicly traded equity funds in Korea was 5.59 percent, with the “Hyundai KOSDAQ Venture” fund having the highest return of 24.48 percent last year.
The IPO market quickly crashed towards the end of the year amid soured sentiment following Kakao Pay’s IPO. Only two IPO stocks managed to debut at prices double those of IPO rates and end at permitted daily highs on the first day, which had been a new entrant’s ritual on the first semester, from September to December.
By Shin Hwa and Susan Lee
[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]