'Record-Breaking IPO' KakaoGames' Ripple Effect

Investor Deposits Surpass 60 Trillion Won
Commission Revenue Also Lucrative

[Asia Economy Reporter Oh Ju-yeon] As the subscription deposit for Kakao Games' initial public offering (IPO) broke the record for the largest amount ever, securities firms are also benefiting accordingly. Investor deposits, which are standby funds in the stock market, have surpassed 60 trillion won, reaching an all-time high, and the surge in average daily trading volume and turnover rate of individual investors is expected to increase securities firms' profits. In particular, securities firms that underwrote the Kakao Games listing have seen a noticeable increase in new account openings, securing potential trading customers.

According to the securities industry on the 3rd, Korea Investment & Securities, the joint lead manager of Kakao Games, saw a 27.7% increase in new account openings in August compared to the monthly average from January to July. Samsung Securities also experienced about a twofold increase in new account openings in August compared to the previous month. Since Korea Investment & Securities and Samsung Securities require accounts to be opened before subscription, many new accounts were opened in August specifically for Kakao Games' public offering subscription.

In the case of KB Securities, new accounts could be opened until the subscription deadline on the 2nd, so the average daily number of new accounts in September increased significantly. Although the average daily new accounts in August had already increased by 30% compared to January to July, September saw an even sharper rise, with new accounts on the 1st and 2nd increasing by 395% compared to the January to July average. Company officials explained that this temporary surge is directly related to the Kakao Games subscription.

Retail deposit assets also increased significantly. Samsung Securities, buoyed by the public offering frenzy including Kakao Games, reported retail deposit assets of 244.1 trillion won as of the 2nd, an increase of more than 44 trillion won in just over two months since surpassing 200 trillion won for the first time in the industry in June. Notably, of the 23 trillion won applied for as Kakao Games subscription deposits, 19.3 trillion won (84%) was new money (based on new deposits from subscription customers between August and September 2), and new customers (those who opened accounts in August among subscription customers) numbered 26,000, accounting for 19% of all subscription customers.

Refunds after subscription are expected to remain in the securities market. During the SK Biopharm listing in July, the refund deposits from SK Biopharm were concentrated in the stock market or reinvested in public offering subscriptions, which was expected to increase subscription competition. According to SK Securities, on June 26, the refund day for SK Biopharm subscription deposits, Shin Do Gi-yeon and Withus Pharmaceutical, which conducted subscriptions, attracted deposits exceeding 1.9 trillion won and 2.7 trillion won respectively, showing a spillover effect. It is analyzed that the refund amount from the 5.9 billion won subscription deposits for Kakao Games will support stock market liquidity. In Samsung Securities' case, only 12% of customers designated bank accounts to receive refunds after the Kakao Games subscription. This suggests that 88% of the refund money remains in the securities market and will be used for various investments.

The underwriting fees for the lead securities firms are also substantial. Based on the fixed public offering price of 24,000 won, the underwriting amounts for Korea Investment & Securities, Samsung Securities, and KB Securities, the lead managers of Kakao Games IPO, are 211.2 billion won, 153.6 billion won, and 19.2 billion won respectively. They will receive a total underwriting fee of 2.2%, which includes a basic fee of 1.2% and a success fee of 1.0%, and the total underwriting fees are estimated to reach 8.4 billion won.

Meanwhile, the increase in individual trading proportions in the securities market is linked to securities firms' profits, so it is expected to have a positive impact not only on IPO lead securities firms but also on the securities industry as a whole. The average daily trading volume in August was 31 trillion won, a 30% increase compared to the previous month. According to KB Securities, the turnover rate of individuals surged to 314.7%, 3.5 times higher than last year's turnover rate of 90.0%. In August, individuals accounted for 79.2% of trading volume. Kang Seung-geon, a researcher at KB Securities, said, "The brokerage business environment can be considered better than in July." However, he also noted that the sharp rise in individual proportions and turnover rates means increased exposure to volatility, leading to greater earnings volatility for securities firms compared to the past.

This content was produced with the assistance of AI translation services.