Unlike the KOSPI, which broke through the 6,000 mark for the first time in a month and continues to soar, a cold snap has hit the initial public offering (IPO) market.
According to the Korea Exchange (KRX) on the 2nd, the number of corporations newly listed on the main bourse and the KOSDAQ in Feb. was zero. Not only is that fewer than the listings in Jan. (two), it is also a sharp drop compared with last year's monthly average (nine).
Preliminary reviews for new listings are also sluggish. The number of corporations filing for preliminary review was four in Dec. last year and five in Jan. this year, and only one—K-Solution—in Feb.
Seasonal factors are cited as the backdrop for the lull in the IPO market. Listings were concentrated at the end of last year, and the Lunar New Year holiday in Feb. brought a traditional off-season effect, analysts said.
Another variable is the exchange's work to prepare guidelines for reviewing duplicate listings. In fact, in Jan., Essex Solutions, an LS Group affiliate, became embroiled in a duplicate listings controversy and voluntarily withdrew its application. After drafting the guidelines on duplicate listings, the exchange is expected to seek market feedback and consult with the financial authorities before pushing to revise detailed regulations.
Still, some expect the IPO market to gradually regain momentum starting this month. Internet-only bank Kbank is set to list on the main bourse on the 5th. In the public subscription for retail investors on the 20th–21st of last month, Kbank recorded a competition rate of 134.6 to 1, and subscription deposits totaled about 9.85 trillion won (including duplicate subscriptions).
In addition, Kanaph Therapeutics, ESteem, AXBIS and Cosmo Robotics are preparing to list.
Park Jong-seon, a researcher at Eugene Investment & Securities, said, "The IPO market showed a lull in Jan. and Feb. this year, but we expect it to gradually recover in Mar.," adding, "Including the heavyweight Kbank, six to eight corporations will list."