Record $53 billion parked in securities accounts as they await Big Hit IPO

2020.09.09 14:39:31 | 2020.09.09 17:43:43

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Record fluid money sat tight in brokerage houses as investors wait to grab the next blockbuster IPO after losing Kakao Games.

According to the Korea Financial Investment Association, balance in securities deposits amounted to 63.3 trillion won ($53 billion) on Sept. 4, adding 16 trillion won from the previous day to a fresh record high.

The cash management account (CMA) balance at stock brokerages also increased by 13 trillion won to 58.1 trillion won from the previous day. A CMA is a brokerage account designed for spending and managing cash, allowing immediate investment in stocks or other financial products.

Money in brokerage accounts surged to new highs amid fever over Kakao Games, gaming affiliate of country’s top mobile chat app operator Kakao Corp. Kakao Games drew retail bids of a whopping 58.55 trillion won for its IPO during its public subscription held on Sept 1-2.

Deposits in brokerage accounts had topped 60 trillion won on Aug. 31, or a day before Kakao Games launched public subscription for retail investors. The balance lost 12 trillion won on Sept 2 upon closing of the game developer’s public subscription, while 16 trillion won dropped out of CMAs.

As only few were lucky to grab Kakao Games’s 3.2 million shares, priced at 76.8 billion won in total, reserved for retail subscription, most of 58 trillion won that the company drew were returned by last Friday. On that day, the combined amount of brokerage account deposits and CMA increased by 29 trillion won.

Market experts suspect the bulk of retail investors’ money parked in brokerage accounts would head to Big Hit Entertainment’s retail subscription scheduled on Oct. 5-6. The Korean label behind K-pop superstar BTS is expected to deliver another blockbuster IPO, with its market capitalization estimated to reach up to 4.6 trillion won.

The stock craze also has driven up the outstanding balance of personal credit loan to fresh record high of 16.8 trillion won on Friday, up 2.4 trillion won from early August.

Investors’ money that have flown into stock market amid IPO boom is expected to stay for a while and help market trade volume to grow, said Kim Hyun-ki, analyst at Hyundai Motor Securities.

By Moon Ga-young and Cho Jeehyun

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