Money raised through IPOs hits record high in 2021 amid ample liquidity, bullish sentiment

A promotional image of Kakao Pay (Kakao Pay)

The amount of money South Korean companies raised through initial public offerings (IPOs) more than quadrupled to a record high last year on the back of ample liquidity and general bullish stock market sentiment. , according to data released on Monday.

A total of 89 companies went public in 2021 by listing shares on the tech-heavy secondary KOSPI and KOSDAQ benchmark markets and raised a total of 19.7 trillion won ($16.4 billion), according to data. Financial Monitoring Service data.

Funds raised in IPOs were up 333.9% from 4.5 trillion won a year earlier, the data showed. The number of companies whose shares are listed for the first time also jumped from 70 the previous year.

The IPO market was driven by the overall rise in local stock markets and ample liquidity injected into the economy, supported by low borrowing costs in line with historically low policy rates intended to stimulate the affected economy. by the pandemic.

Investors took more interest in new stock listings, with the competition ratio for IPOs rising to an average of 1,136 to 1 last year from 956 to 1 a year earlier.

Prices of newly listed shares closed 57.4% higher on average on their first day of trading, compared to their IPO prices.

The return marked the highest in five years, according to the data.

Their average prices also jumped 54.8% at the end of last year compared to IPO prices. But of the companies that went private, 28 companies, or 31.5%, saw their shares fall below IPO prices late last year, the data showed. (Yonhap)

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