On the secondary bourse Kosdaq, seven companies have begun trading since October, but they have largely been influenced by marketwide volatility due to US-China trade war threats and other external uncertainties sweeping the market.
Choi Jong-kyung, an analyst at BNK Investment & Securities, projected 20 companies to carry out book building in November -- an IPO procedure after a company gains preliminary approval by the Korea Exchange and submits a registration document to the Financial Services Commission.
Considering 51 companies had undergone the procedure through end-October, the relatively low monthly figure appears “extraordinary,” he said.
“If companies flock to go on book building at a certain period, a drop in demand for stock subscription is inevitable,” Choi wrote in a note to investors. “Thus, the offering price is likely to be set lower than the anticipated price.”
By Son Ji-hyoung