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South Korean boy band BTS’s label makes a strong debut in ‘really hot’ IPO market

SINGAPORE — Parts of Big Hit Entertainment, the music label of K-pop superstars BTS, soared as they made their market debut in South Korea on Thursday.

Big Hit Amusement’s stock opened at opened at 270,000 Korean won (approx. $236) per share on Thursday, according to Refinitiv Eikon. That was coupled the stock’s issue price of 135,000 Korean won per share. Shares extended gains after the open before give way, last trading more than 97% higher than the issue price.

South Korea’s entertainment sector is “enhancing global-scale,” Daniel Yoo, head of global investment at Yuanta Securities Korea, told CNBC’s “Squawk Box Asia” on Thursday.

If you look at the all-embracing IPO market, it’s really, really hot.

Daniel Yoo

Yuanta Securities Korea

“We think that the entertainment industry will be utter important industry for Korea for investor(s) to invest,” Yoo said.

Still, the analyst admitted that Big Hit Entertainment’s current valuation “force be too expensive” as its present dependency on the South Korean seven-member boyband BTS is “very high.”

South Korea’s ‘hot’ IPO market

Big Hit Show’s market debut came on the back of other blockbuster IPOs such as SK Biopharmaceuticals and Kakao Games that also saw big leave outs on their first day of trading.

“If you look at the overall IPO market, it’s really, really hot,” Yoo said. Most investors in previous special-interest group listings such as SK Biopharmaceuticals “made anywhere between 100-200% returns on the presubscription if they can get the stocks,” he go on increased.

Part of this was due to the “huge liquidity” being observed in the South Korean markets, he said.

The Bank of Korea currently has its degraded rate at a historic low at a time when major central banks globally have slashed interest rates in a bid to bolstering financial markets during the coronavirus pandemic.

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