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| Dealers work at Hana Bank's office in Seoul, Thursday. Yonhap |
By Lee Min-hyung
Korean companies are delaying their listing plans amid weakening investor sentiment prompted by aggressive tightening of global monetary policy.
As the tumbling benchmark KOSPI keeps setting a new yearly low each day, a group of companies is on track to withdraw their initial public offering (IPO) plans.
OneStore, a local app market operator, was scheduled to go public on the main bourse before the end of the month. But it decided recently to drop the plan, as its desired offering price did not match that of institutional bids.
With chilly investor sentiment being felt here and abroad, this also came as a burden for the firm's listing. The KOSPI extended its losses once again Thursday, setting a new low with a drop of more than 1 percent from the previous day.
Given the U.S. Federal Reserve has not yet entered what is considered very big rate hikes, stocks from emerging markets including Korea's are exposed to possible risks of additional falls throughout the end of 2022 when the Fed and the Bank of Korea will keep pushing for tightening monetary policies.
Tailim Paper, a paper products producer here, also decided not to go public for a similar reason as One Store. The paper manufacturer said Wednesday it would delay the IPO timeline, and "try again at an opportune time when the company can be valued properly."
The announcements from the two companies have drawn criticism from investors, but market insiders said it is understandable for them to make such a decision, reflecting on the rapidly plunging stock market and diminishing demand from investors due to global monetary uncertainty.
"The Korean stock market is under a growing burden, as Wall Street is on the decline amid growing fears over the rising prices," Mirae Asset Securities analyst Seo Sang-young said. "Investor sentiment will likely remain weak, as the Fed will not back away from its stance of aggressive rate hikes."
The latest decision from the two companies is expected to discourage other firms' listing plans during this period of economic uncertainty here and abroad.
Early this year, Hyundai Engineering delayed its IPO schedule, when the local stock market lost its vibrancy after enjoying strong performance last year when the main bourse set a new historic high on pandemic-sparked liquidity expansion here and abroad. At that time, the company's post-IPO value was estimated to top as high as 10 trillion won. SK Shieldus, a cybersecurity service affiliate of SK Telecom, also withdrew its IPO bid recently in response to lackluster stock performance here.
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