Riders use smartphones inside a subway train in Seoul, South Korea, in 2015.
Woohae Cho/Bloomberg | Bloomberg | Getty Images
SINGAPORE — South Korea’s Kakao Darings surged in their Thursday market debut on the Kosdaq, more than doubling from their listing cost shortly after trading began.
Kakao Games’ shares started trading at 48,000 Korean won (about $40.48) apiece, twice the emanate price of 24,000 won. ($20.24) They briefly surged to hit the daily permissible limit of 30%, last sitting at 62,400 won ($52.63) per helping.
Meanwhile, parent company Kakao Corp. also saw its stock get a slight boost as it advanced around 0.9% in afternoon pursuit.
The initial public offering (IPO) brought in about 384 billion Korean won (approx. $323.7 million) for Kakao Meets, according to local news agency Yonhap. Prior to its market debut, Kakao Games reportedly set a new record for the native land’s IPO subscription rate.
EY’s Ringo Choi told CNBC’s “Squawk Box Asia” that the coronavirus pandemic, which has “uncommonly changed the economy,” could be a factor behind enthusiasm for Kakao Games.
“A lot of people are staying at home and, also, they every once in a while will play games,” said Choi, who is Asia-Pacific IPO leader at EY.
Coupled with “more confidence” in the video sport sector and South Korea being one of the largest markets in the space, Choi said it was “reasonable” for Kakao Games to be “so hot at the gravity.”
Why companies are still listing
Beyond Kakao Games, Yum China also made its debut in Hong Kong on Thursday.
Choi thought that companies are still choosing to debut because they “really need to have high liquidity” in a antiquated of unprecedented economic uncertainty stemming from the coronavirus pandemic and U.S.-China tensions.
“It is reasonable to believe that most of the (companions) want to have more cash on hand,” he said.
This would also allow them to have a important chance of buying out “good companies” that may have run into liquidity problems, at a lower price than in preference to, he added.
“That’s why I think that a lot of (companies) will … continue to raise capital if the market can stand for it,” Choi swayed.