Huge Funds Flock to Kakao Games... Record-Breaking Competition Rate of 1479 to 1

Securities Firms' CMA Balance Surpasses 60 Trillion Won for the First Time
Kakao Games Demand Forecast Competition Ratio 1479 to 1... Twice That of SK Biopharm, a 'Record-Breaking' Level

Namgoong Hoon, CEO of Kakao Games, is speaking at the online Initial Public Offering (IPO) briefing held on the 26th.
[Photo by Yonhap News]

[Asia Economy Reporter Minwoo Lee] The balance of securities firms' Comprehensive Asset Management Accounts (CMA) has surpassed 60 trillion won for the first time ever. This surge of funds is attributed to the upcoming public offering subscription of Kakao Games. Since the demand forecast already recorded an all-time high competition rate of 1,479 to 1, attention is focused on whether the public offering subscription frenzy seen during SK Biopharm's listing in the first half of the year will be replicated.

According to the Korea Financial Investment Association on the 31st, as of the 27th, the balance of securities firms' CMA was 60.4098 trillion won. This is an increase of more than 4.3 trillion won in just one month from 56.077 trillion won on the 31st of last month. This is the first time the securities firms' CMA balance has exceeded 60 trillion won. The situation is similar to that of SK Biopharm in June. On June 22, the day before SK Biopharm's general subscription, the securities firms' CMA balance was 57.5246 trillion won. At that time, it surged by about 4 trillion won from 53.5854 trillion won a week earlier (June 15), then sharply dropped to 46.8517 trillion won on June 24, when the subscription closed.

It is interpreted that liquidity in the market has poured in ahead of the general investor subscription for Kakao Games scheduled for July 1-2. Kakao Games already recorded a competition rate of 1,479 to 1 in the demand forecast conducted for institutional investors on June 26-27. This is nearly twice the competition rate of 836 to 1 for SK Biopharm's demand forecast. A total of 1,745 domestic and foreign institutions participated, including 407 foreign institutional investors. Both the competition rate and participation rate are the highest ever in domestic IPO history. Because of this, the perception is spreading that receiving shares is like winning the 'lottery.' Im Seunghwan (35, pseudonym), an office worker, said, "I plan to participate with about 40 million won," adding, "As seen with SK Biopharm, if you get it, the price definitely rises, so there is no reason not to invest even a small amount."

Due to this enthusiasm, it is expected that an unprecedented amount of funds will pour into Kakao Games. The record for the largest general investor subscription deposit is 30.99 trillion won for SK Biopharm. The industry expects Kakao Games to easily exceed 10 trillion won, considering that companies slightly smaller than Kakao Games, such as Lemon (2.3618 trillion won) and A-Pro (4.6759 trillion won), attracted several trillion won each. The relatively low public offering price is also a point of interest for investors. Kakao Games' public offering price was set at 24,000 won on the day. Considering that the over-the-counter stock price was in the 63,000 won range, it is analyzed that investors can expect more than double the profit.

Recently listed stocks have also significantly exceeded their public offering prices from the first day. SK Biopharm, with a public offering price of 45,000 won, recorded the first 'ttasang' (opening price formed at double the public offering price followed by the upper price limit) on the KOSPI on its first day of listing, soaring to 127,000 won. It then continued to hit the upper price limit for two consecutive days, surpassing 200,000 won. Excluding real estate investment trusts (REITs) and special purpose acquisition companies (SPACs), 12 out of 15 stocks listed after SK Biopharm closed above their public offering prices on the first day. A-Pro (159.7%) and Withus Pharm (116.4%) more than doubled their public offering prices. Iruda (96.1%) and Korea Pharma (87.2%) also rose nearly 100% above their public offering prices.