Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Rookie stocks make underwhelming market debut
Charts of the benchmark KOSPI and the junior Kosdaq bourses are seen on an electronic board at a dealing room in this undated file photo. Yonhap
By Yi Whan-woo
A string of newly listed firms is experiencing a steep fall in prices following their debut on the stock market.
Such falls, according to market observers, Wednesday, can pour cold water on retail investors’ growing demand for public subscriptions of shares ahead of planned initial public offerings (IPOs).
Of the newly listed firms, K3i, a software developer in virtual and augmented reality, finished at 10,550 won ($7.90), Tuesday, when it made its debut on the tech-heavy Kosdaq.
The closing price was 31.94 percent lower than its IPO price.
The company went on a losing streak Wednesday, as it dropped by another 7.3 percent to 9,780 won.
Also making its Kosdaq debut Tuesday, NextBioMedical, a medical device manufacturer, went down 18.3 percent from its IPO price to close at 23,700 won. The price remained unchanged at 23,700 won on Wednesday.
The two companies were among six newly listed business this week that drew as many as 1,000 retail investors when they opened public subscription of shares before going on the market. They, however, all struggled after their IPOs.
“The sluggish performances can adversely affect the IPO market, which once drew concerns over excessively high demand,” an analyst said.
Speaking on condition of anonymity, the analyst said it is “ideal for retail investors to buy shares of the newly listed companies by considering their post-IPO performances.”
Some market observers deem that investor sentiment on newly listed stocks is waning in the second half, especially after the country’s economy contracted for the first time in 18 months during the April-to-June period. It shrank 0.2 percent from the previous quarter when it grew 1.3 percent.