K-pop event Shares of BTS label will enter the South Korean market

SINGAPORE: Shares of K-pop superstar BTS’s music label Big Hit Entertainment soared in South Korea on Thursday.

Shares of Big Hit Entertainment opened at 270,000 Korean gin (approximately 6,236) per share on Thursday, according to the refinitive icon. The issue price per share of the stock was double that of 135,000 Korean. Expanded gain in shares after opening before weakening, more than 97% of issue price in last trade.

Daniel Yu, head of global investments at Yuanta Securities Korea, told CNBC’s “Squawk AsiaX Asia” on Thursday that South Korea’s entertainment sector was “becoming global.”

If you look at the overall IPO market, it’s really, really hot.

Daniel U.

Yuanta Securities Korea

“We think the entertainment industry will be a very important industry for Korea for investors (s) to invest in.”

However, the analyst acknowledged that Big Hit Entertainment’s current valuation could be “too expensive” because its current reliance on South Korean seven-member BoyBand BTS is “too high.”

South Korea’s ‘hot’ IPO market

Big Hit Entertainment’s market debut saw the arrival of other blockbuster IPOs such as S.K. Biopharmaceuticals and Uncle Games came in behind which saw a big jump in their first trading.

“If you look at the IPO market as a whole, it’s really, really hot,” the UAE said. He added that in an earlier public listing like SK Biopharmaceuticals, most investors offered 100-200% returns on prescriptions if shares could be found.

Part of this was due to the “huge liquidity” seen in South Korean markets, he said.

The Bank of Korea currently has its base rate at a historically low level at a time when major central banks have cut interest rates globally to support financial markets during the coronavirus epidemic.