Large Newly Listed Stocks Attracting Foreign Investor Sentiment Ahead of Institutional Supply Release

Kakao Bank, SK Bioscience, Krafton Lead Foreign Net Purchases in September
Kakao Bank Sees Over 600 Billion KRW Net Buy in a Single Day
"Strong Fundamentals... Institutional Sell-Offs Present Buying Opportunities at Lows"

KakaoBank Pangyo Office

[Asia Economy Reporter Minwoo Lee] As large newly listed stocks such as SK Bioscience, KakaoBank, and Krafton are expected to release institutional lock-up shares, foreign investors are instead accumulating these stocks in large quantities. This is interpreted as a move to buy at the bottom based on the judgment that the companies' growth potential remains unchanged.

According to the Financial Supervisory Service on the 6th, starting with KakaoBank on this day, Krafton will reach one month since its listing on the 10th, and the institutional investors' lock-up period will expire. On the 18th, SK Bioscience will also reach six months since its listing, and institutional shares are expected to be released.

In the case of KakaoBank, 3,141,600 shares will be released into the market. This corresponds to 8.72% of the total institutional allocation and 0.66% of the total shares, which were pledged for a one-month lock-up at the time of the public offering. On the 2nd, when the Korea Post sold about 2.9% of KakaoBank shares through a block deal (off-hours large-scale trade), the stock price plunged about 7%. As of 9:25 a.m. on the same day, KakaoBank's stock price was 77,200 won, down 4.46% from the previous trading day. Nevertheless, foreign investors have been steadily accumulating KakaoBank shares. From the beginning of this month until the previous trading day, foreign investors purchased a total of 589.9 billion won worth of KakaoBank shares. This was the highest net foreign purchase during the period, far surpassing Samsung Electronics' 318.8 billion won in second place. On the 2nd, foreign investors made the largest single-day net purchase since listing, buying 631.6 billion won worth of shares.

Foreign investors have also focused on Krafton, where 966,400 shares, equivalent to 16.9% of the institutional allocation, will be released on the 10th. They have bought shares for three consecutive trading days, with a total net purchase of 79.8 billion won. This ranks eighth in net foreign purchases in the KOSPI market in September. As of 9:30 a.m. on the day, the stock price fell nearly 5% from the previous trading day to the 480,000 won range, but foreign investors continue to net buy about 300 million won worth of shares. For SK Bioscience, where 31.28% (3,948,100 shares) of the institutional allocation will be released on the 18th, foreign investors have purchased a total of 126 billion won (ranked fifth in net purchases) worth of shares this month.

Although institutional shares are being released, it is interpreted that foreign investors are absorbing the selling pressure and buying at the bottom because the companies still have sufficient growth momentum. In the cases of Krafton and SK Bioscience, foreign investors and other institutional investors are buying shares that individual investors have sold. Hwang Sewoon, a research fellow at the Capital Market Institute, explained, "This is an investment based on the companies' fundamentals, market dominance, and future growth drivers. Even if the lock-up shares are released, the nature of the companies does not change, so foreign investors seem to be trying to buy at the bottom."