Paid-in Capital Increase
The capital increases of companies listed on the benchmark Korea Composite Stock Price Index (KOSPI) grew this year, while that on the secondary KOSDAQ market dropped. The KOSPI saw the total capital increases significantly rise compared to a year ago due to the large-scale paid-in capital increase by Daewoo Shipbuilding and Marine Engineering (DSME).
According to the Korea Exchange on November 5, the total capital increases of companies listed both on the KOSPI and KOSDAQ markets stood at 12.1 trillion won (US$10.89 billion) from the beginning of this year to October 31, up 20 percent from 10.09 trillion won (US$9.08 billion) a year earlier.
The figure on the KOSPI market reached 8.9 trillion won (US$8 billion), up 37.2 percent from 6.48 trillion won (US$5.84 billion) at the same period a year ago, but that on the KOSDAQ market stood at 3.21 trillion won (US$2.88 billion), down 11.1 percent from 3.6 trillion won (US$3.24 billion) over the same period. This is due to the fact that DSME had three large-scale capital increases worth 3.38 trillion won (US$3.04 billion) this year, showing a sharp rise from the same period last year.
By allocation method, a capital increase through third-party allocation accounted for 63.7 percent, or 7.71 trillion won (US$6.94 billion), of the total, followed by public offering with 18.7 percent, or 2.26 trillion won (US$2.03 billion) and stockholder allocation with 17.7 percent, or 2.14 trillion won (US$1.92 billion).
The capital increase through third-party allocation in the total market rose 83.5 percent compared to a year ago, while that through stockholder allocation and public offering decreased 40.9 percent and 0.6 percent, respectively. This is largely due to DSME’s large paid-in capital increases from Korea Development Bank.
Both the KOSPI and KOSDAQ markets preferred the capital increase through third-party allocation to that through stockholder allocation and public offering.
The amount of capital increases through stockholder allocation on the KOSPI market decreased 58.5 percent to 1.19 trillion won (US$1.07 billion) compared to the same period last year, while that through public offering and third-party allocation increased 15.7 percent and 202.4 percent, respectively, to 2.02 trillion won (US$1.82 billion) and 5.69 trillion won (US$5.13 billion).
The amount of capital increases through stockholder allocation on the KOSDAQ market increased 25.2 percent to 950.1 billion won (US$855.25 million) over the same period. On the other hand, that through public offering dropped 54.3 percent to 240.8 billion won (US$216.76 million) and third-party allocation decreased 13.1 percent to 2.01 trillion won (US$1.81 billion).
DSME ranked first in the KOSPI market in terms of the amount of paid-in capital increase issuance, followed by Hyundai Robotics with 1.73 trillion won (US$1.55 billion) and STX Heavy Industries with 584.3 billion won (US$525.69 million).