The Spring of Liquidity Ends... The IPO Party Is Over

Liquidity Slowdown Accelerates Next Year
Uncertainty Expands, Individual Investors Shrink
Decrease in Major IPOs

[Asia Economy Reporters Song Hwajeong and Gong Byungseon] The hot frenzy of initial public offerings (IPO) that has been heating up since last year is expected to cool down next year. This is due to reduced liquidity, increased market uncertainty leading to a decline in individual investors, and a decrease in large-scale IPOs.

According to the Korea Exchange on the 9th, the number of newly listed companies this year (excluding KOSDAQ listings through SPAC mergers and transfers) reached 109 as of yesterday, already surpassing last year's total of 106. The total amount raised through public offerings is 19.57 trillion won, approaching 20 trillion won. This is the largest scale ever recorded. This year, large-scale listings such as SK Bioscience, SK IE Technology, Krafton, KakaoBank, and KakaoPay have lined up, making the IPO market hotter than ever.

However, this enthusiasm is expected to cool down next year. This is because the liquidity that supported the public offering frenzy is expected to decrease. Laborngil, a researcher at Shinhan Financial Investment, said, "Next year will see a full-scale slowdown in liquidity," adding, "The slowdown in liquidity markets can lead to a decrease in stock supply such as IPOs and rights offerings."

Furthermore, the slowdown in liquidity markets is also expected to lead to a decline in the investment sentiment of individual investors who drove this year's public offering frenzy.

The number of large-scale listings is also expected to decrease. Although LG Energy Solution, Hyundai Engineering, SSG.com, and Market Kurly are considered major IPO candidates next year, they do not match this year's record-breaking level. Park Jongseon, a researcher at Eugene Investment & Securities, said, "Large-cap stocks will not appear as much as this year," adding, "Many large companies listed this year because the market conditions were good and the performance of public offerings earlier this year was strong, but since the current market situation is somewhat sluggish, large companies will observe the market conditions in the second half of this year and the first half of next year before listing." Earlier, due to poor institutional demand forecasts, two companies, Simone Accessory Collection last month and SM Shipping this month, withdrew their public offerings.

The 'Ttasang' phenomenon (where the stock price opens at twice the public offering price and then hits the upper limit) that acted as a catalyst for the public offering frenzy is also fading. Researcher Park analyzed, "Ttasang requires two trends to continue: market sentiment and whether many individual investors are investing," adding, "However, since the market conditions have not been good since the second half of the year and the returns like those in the second half of last year are not coming out, individual investors are also investing cautiously."

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