Data released on Thursday revealed that corporate direct financing in South Korea rose by 23.2% in August compared to the previous month. This was mainly due to the surge in financial bond issuances.
Companies raised a total of 19.79 trillion won (US$14.86 billion) through stocks and bonds, which was an increase of 3.72 trillion won from July. Direct financing is a method of obtaining funds directly from the stock and bond markets, as opposed to borrowing from banks and other financial institutions.
Although paid-in capital increases saw a decline, initial public offerings experienced a rise, resulting in a contraction of 11.7% in stock sales to 566.9 billion won. Bond sales, however, skyrocketed by 24.6% to 19.2 trillion won thanks to a significant rise in financial debentures.
As of the end of August, the value of outstanding corporate bonds had increased by 0.6% to 628.5 trillion won. Commercial papers issued by local firms reached 32.2 trillion won, which was 8.3% lower than the previous month, while short-term bonds totaled 63.05 trillion won, representing a 7.1% month-on-month increase.