Companies' first sale of stocks, or initial public offering (IPO) and corporate debt sales in South Korea recorded the highest this year in July, leading to a more than 30 percent rise in direct corporate financing, financial watchdog data showed Thursday.
Direct corporate financing, including sales of stocks and bonds, was 12.25 trillion won (11.97 billion U.S. dollars) in July, up 31. 4 percent from a month earlier, according to the Financial Supervisory Service (FSS).
Rights offering, or sales of listed stocks, stood at 723.1 billion won last month, and the IPO numbered eight worth 122.9 billion won, the highest monthly figure this year.
The IPO growth came as companies sought to avoid submitting semi-annual report by going public before July. The first-stock sellers are required to submit the report when going public in the second half. The deadline was June and the results were recorded in July.
Debt financing, including sales of corporate bonds, bank debentures and asset-backed securities (ABS), surged 36 percent from a month earlier to 11.4 trillion won in July.
Debt sold by industrial companies reached this year's high of 4. 89 trillion won in July. All were unsecured bonds issued by large corporations, such as affiliates of SK and Lotte.
Bipolarization in the corporate bond market lasted. Sale of bonds with a credit rating of"A"or above accounted for 97.3 percent of the total, and the remaining was 135 billion won in corporate bond sales rated"BBB."