South Korean local IPO market has faced challenges recently. Plus, it still requires patience due to the presidential election. As a result one issuer delays its offering.
Voronoi, a biotech company which planned to book for an up to W130bn IPO last February 24 must wait until the March 9 poll. The rescheduled deal will run from March 14 to 15, a few more days later to delay more. Korea Investment & Securities and Mirae Asset Securities are leading the float of market capitalization with an indicative price range of W50.000-W65.000.
Presidential election sparks more uncertainty to market volatility. This is because the new leadership may change national regulations. But bankers said if the winner is Yoon Suk-yeol of the conservative People Power Party, the market would be more cooperative and friendly. On the other hand, when the poll wins Lee Jae-myung from Democratic Party, it would be hard to see positive changes since he is labor-friendly.
To add a view, Lee Jae-myung currently leads the poll, slightly above Yoon Suk-yeol. Lee proposes universal basic income, following the Kospi stock index to double its current value.
South Korean IPO frenzy has been slowing down since the Ukraine crisis and risk sentiments. This affects LG Energy Solution. ECM banker said that the market window would be tough even though smaller deals continue to go on. LGES traded 68% higher since their debut, but the global stock market inflicted a decline to 40% above IPO price. Kospi 200 Index is down. Hyundai Engineering also pulled its IPO after failing to engage sufficient demand.
Then, Hyundai Oilbank remains reviewing market conditions for a $1.5bn-$2bn float with professionals. IPO is put on hold due to the scrutiny over the balance sheet. Hyundai Heavy, on this occasion, owns 74.13% of Hyundai Oilbank at stake.
