IPO Season
It has been found that public offering funds in South Korea has attracted a total of 334.9 billion won until May 23 since the beginning of this year, which is quite contrary to an outflow of 1.4657 trillion won from stock funds for the same period.
Likewise, high-yield funds subject to separation taxation, which are another way of investing in IPO stocks, are attracting an increasing number of investors. According to industry sources, the total amount of such high-yield funds raised during the period amounts to 590.8 billion won. This type of funds is given 10% of IPO stocks beforehand and subject to separation taxation at 15.4% with respect to the dividend and interest incomes up to 50 million won per person.
This trend is attributable to investors’ expectations for a series of IPO cases to follow one another in the second half of this year. As many as five companies are slated to start their public offering subscriptions in June alone. For example, that of Hotel Lotte is scheduled for June 21 and 22 with the size of the public offering estimated at 5.7 trillion won. Those of Doosan Bobcat, Samsung Biologics, Netmarble Games, Celltrion Healthcare and many more are to be carried out in the second half. The public offerings of Doosan Bobcat and Samsung Biologics are estimated at one trillion won and three trillion won, respectively.
The increasing popularity of public offering funds also has to do with portfolio stability based on mid-risk mid-return investment. “The South Korean stock market has been bearish for a month or so and is likely to remain uncertain for the rest of this year,” said a local asset manager, adding, “Under the circumstances, the popularity of public offering funds is likely to continue for the time being.”