Corporate direct financing in South Korea slips 3.1%

Direct financing by South Korean companies slid 3.1% in the first six months of the year from a year earlier due mainly to a drop in corporate bond sales, the financial watchdog said Sunday.
Local companies secured a total of 58.1 trillion won about (US$56.4 billion) during the January-June period by selling stocks and debts, compared with 60 trillion won over the same period last year, according to the Financial Supervisory Service (FSS).
Corporate debt sales sank to a four-year low of 55.2 trillion won in the first half of the year, down 5.2% on-year from 58.2 trillion won, according to South Korea's (Yonhap) News Agency.
The FSS noted that a prolonged slump in the local corporate bond market affected the corporate direct financing market.
Total stock sales soared 66.4% on-year to 2.9 trillion won over the cited period as large companies raised funds via capital increases by issuing new stocks.
Between January and June, 36 companies issued new shares to increase capital by 2.8 trillion won, nearly doubling from 1.5 trillion won the previous year.
But the jump was offset by a plunge in initial public offerings (IPOs). Only seven companies went public on the secondary KOSDAQ bourse during the six-month period, down from 12 a year earlier.
The value of IPOs stood at 105.2 billion won, the smallest amount in four years, compared to a four-year high of 2.7 trillion won in the first half of 2010, the watchdog said.