By Scott Murdoch and Joyce Lee
SYDNEY/SEOUL (Reuters) -Shares of a small Japanese technology firm shot up nearly 60% on its first day of trade on Wednesday, while Seoul’s largest initial public offering (IPO) in three years tanked almost 10% as volatility driven by geopolitics again gripped Asia’s equity markets.
South Korea’s LG CNS shares dropped from opening bell and traded in negative territory for the session, failing to arrest the recent trend of weak debuts for the Seoul market.
The IT, cloud and AI services provider’s shares closed at 55,800 won, down from their issue price of 61,900 won.
Shares of Next Generation Technology – the first IPO debut of 2025 in Tokyo – traded 58% higher before paring some gains across the day. It raised 1.3 billion yen in the IPO ($8.49 million), according to its regulatory filings.
The strong first day performance came as Tokyo’s Nikkei nudged up 0.1% on Wednesday, In Seoul, the Kospi gained 1.1%.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.44% higher later Wednesday as China’s main equities indices traded lower.
The prospect of a trade war between the U.S and China as tit-for-tat tariffs between the world’s top two economies has raised investor concerns about financial market volatility over the near term.
Asian deal makers were hopeful the region’s equity capital markets would perform better in 2025 as global interest rates began to fall and more Chinese IPOs were given regulatory sign off.
LNG CNS last month priced its IPO at the top of its targeted valuation range, raising 1.2 trillion won ($827.1 million).
At closing, the firm’s market valuation was about 5.4 trillion won.
The IPO is the largest since LG Energy Solution raised $10.74 billion in 2022.
Last year, South Korea raised $2.85 billion worth of IPOs, according to LSEG data, up slightly from $2.79 billion in 2023.
LG CNS’ offering was one of the few by South Korean firms to draw strong demand in recent months against the backdrop of an IPO market slump since the second half of last year, analysts said.
The retail portion of the initial public offering was oversubscribed nearly 123 times, while more than 2,000 institutional investors made bids worth 76 trillion won during the bookbuilding last month, according to the company.
However, LG CNS’s weak market debut has continued a trend of similarly disappointing listings since last year, which analysts said could further discourage investors and other companies from coming to market.
($1 = 1,450.8900 won
($1 = 153.1300 yen)
(Reporting by Joyce Lee and Scott Murdoch; additional reporting Nobuhiro Kubo. Editing by Jacqueline Wong & Shri Navaratnam)
