South Korea plays foolish game of IPO Whac-A-Mole : comparem

South Korea plays foolish game of IPO Whac-A-Mole


Robyn Mak
3 minute read
The PlayerUnknown's Battlegrounds video game is seen in this illustration photo November 22, 2017. REUTERS/Thomas White/Illustration
HONG KONG, July 23 (Reuters Breakingviews) - South Korea is learning how hard it is to cool down an overheating stock market. The country's financial regulator has intervened recently on the initial public offerings of video-game developer Krafton (259960.KS) and others. Yet Kakao Bank’s upcoming market debut signals frothy deals will persist.
The benchmark KOSPI 200 is up 47% over the past year, making it the best-performing major index globally. Credit a growing army of mom-and-pop traders, who account for a whopping 90% of daily volumes on local exchanges this year. Of the 10 largest domestic companies by market capitalisation, half trade at over 35 times forward 12-month earnings, per Refinitiv, including $57 billion super-app operator Kakao Corp (035720.KS) and contract-drug maker Samsung Biologics (207940.KS). Their shares fetch 73 times and 142 times, respectively.

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