Major unlisted stocks plunge amid rate hikes, capital outflow

The Korea Times

The Korea Times

Finance

Tue, October 3, 2023 | 05:44

Markets

Major unlisted stocks plunge amid rate hikes, capital outflow

Posted : 2022-10-20 16:49

Updated : 2022-10-21 16:42

An official at Toss works at its headquarters in Seoul in this file photo taken on June 9, 2021. Yonhap

By Lee Min-hyung

Once-promising unlisted stocks have extended sharp declines this year amid ever-growing fears of further rate hikes and capital outflow from the local stock market here.

According to data from Dunamu's Stock Plus, an unlisted stock trading platform, most large-cap unlisted stocks suffered double-digit declines in their stock price and market capitalization in 2022.

Shares of Viva Republica, the operator of the popular money transfer app Toss, were traded at as high as 167,000 won per share in November last year, but the price dropped to around 41,000 won as of Wednesday. Viva Republica is the largest unlisted firm in terms of market capitalization in Korea.

The stock value of other big names was also on a sharp decline during the same period. Shares of K bank, a first-generation mobile lender, have dropped by more than 50 percent in around six months. K bank shares were traded at more than 23,000 won in April this year, but tumbled close to 10,000 won on Wednesday. The stock price of Kurly, the operator of the e-grocery platform Market Kurly, also went down by more than 70 percent during the same period.

The unlisted stocks were also hit hard by the ongoing cycle of monetary tightening, just like large-cap stocks listed on the benchmark KOSPI. With Korea's leading tech firms ― such as Samsung Electronics ― reporting a dismal stock performance for the first three quarters of this year combined, a number of minor stocks have also suffered major losses due to chilly market sentiment sparked by the U.S. Fed's rate hikes.

Nevertheless, chances are that the unlisted stock market will continue to face downward pressure until the end of 2022, as the Fed and the Bank of Korea are widely forecast to carry out additional rate hikes to tame soaring inflation.

"Investors are advised to maintain a wait-and-see attitude this year as lingering monetary uncertainties will likely pull down major asset markets here and abroad," an industry source said.

mhlee@koreatimes.co.kr