Newly Listed Stocks Year-End Return 25%... "Best First Week Return"

[Image source=Yonhap News]

[Asia Economy Reporter Ji-hwan Park] The year-end returns of newly listed stocks were found to average 25% compared to the initial public offering (IPO) price. The highest returns were observed during the first five days after listing. In contrast, returns were the weakest about a month after listing.

According to Hana Financial Investment on the 16th, an analysis of the stock prices of IPO companies listed on the KOSPI, KOSDAQ, and KONEX markets from 2015 to 2020 showed that the average year-end return in the year of listing was 24.7% compared to the IPO price.

The average return of 118 newly listed stocks in 2015 was 16.72%. The average returns of newly listed stocks in 2016 (82 stocks), 2018 (101 stocks), and 2019 (91 stocks) were also 7.70%, 7.72%, and 7.03% respectively, compared to the IPO price.

However, the average return compared to the opening price was negative except for 2017 (3.94%) and 2020 (3.94%). In 2018 (-17.76%) and 2016 (-10.83%), double-digit declines were observed.

Returns were highest during the first five days after the IPO. Conversely, the weakest returns were seen about one month after listing.

The return during the first five trading days after listing was 30.0% compared to the IPO price. At around one month, on the 19th and 26th trading days, returns were 23.6% and 23.7%, respectively. Returns on the 33rd and 40th trading days, which are after one month, were 24.1% and 25.1%, higher than on the 26th trading day. This year as well, the return at the 5 trading day mark was the highest at 63.96%.

It was found that the higher the subscription competition rate, the higher the opening price was formed. Stocks with a subscription competition rate of over 2500 to 1 started trading at 100% of the average IPO price on the listing day. Companies with competition rates between 1500 and 2000 to 1 showed 84.07% of the IPO price, and those with competition rates between 1000 and 1500 to 1 showed 74.50%.

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