SEOUL: Corporate direct financing in South Korea experienced a significant surge in September, driven primarily by an increase in debt sales, recent data revealed.
According to Yonhap News Agency, local companies raised a total of 31.6 trillion won (approximately US$23 billion) in September through the sale of stocks and bonds. This marks a 57.6 percent increase from the 20.1 trillion won recorded in August, as reported by the Financial Supervisory Service. However, while debt sales saw a notable rise, equity issues witnessed a steep decline.
Equity issues fell sharply by 71 percent to 111.1 billion won in September from 383.7 billion won in August. The data indicated a 73.7 percent decrease in the volume of stocks sold through initial public offerings, dropping to 61.8 billion won. Rights offerings also saw a significant decrease, falling 66.8 percent to 49.3 billion won from 148.6 billion won in the previous month.
Despite the downturn in stock sales, the increase in bond issues more than compensated for
this decline. Local businesses issued 31.5 trillion won worth of bonds in September, which represents a 59.9 percent rise compared to the previous month. The outstanding value of corporate bonds reached 673 trillion won by the end of September, a rise of 11.7 trillion won from the end of August.
Additionally, the issuance of commercial papers by local companies amounted to 41.3 trillion won in September, reflecting a 10.7 percent increase from the preceding month.