Interest Rate Hike 'Cold Wind'... Sharp Decline in Corporate Fundraising Last Month

[Asia Economy Reporter Ji Yeon-jin] Last month, the direct financing performance of companies shrank. The initial public offerings (IPO), which led record-breaking fundraising last year, have cooled down, and the issuance of corporate bonds has significantly decreased as interest rate hikes have taken full effect.

According to the "February Corporate Direct Financing Performance" announced by the Financial Supervisory Service on the 23rd, stocks and corporate bonds worth 15.5081 trillion won were issued last month, a 43.7% decrease compared to the previous month. In the stock market, capital increases by listed companies such as Doosan Heavy Industries recorded 1.1818 trillion won, more than six times the previous month, but fundraising through IPOs dropped sharply by 97.8% to 232.9 billion won compared to the previous month due to the base effect of LG Energy Solution's listing in January.

Corporate bonds were issued worth 14.0934 trillion won, down 2.8881 trillion won (17%) from the previous month, as investment sentiment weakened due to the Bank of Korea's base rate hike in January and concerns over additional rate hikes. General corporate bonds decreased by 5.6% to 5.375 trillion won (55 cases), and financial bonds amounted to 8.2564 trillion won (159 cases), down 24.4%.

As of the end of last month, the total outstanding corporate bonds stood at 630.2597 trillion won, an increase of 420.1 billion won (0.1%) compared to the previous month (629.8396 trillion won).

Last month's issuance of commercial paper (CP) and short-term bonds totaled 124.5644 trillion won, down 17.3205 trillion won (12.2%) from the previous month. CP issuance totaled 29.0217 trillion won, a 1.3% decrease from the previous month, while short-term bonds amounted to 95.5427 trillion won, down 15.1%. The outstanding CP balance as of the end of last month was 235.2191 trillion won, and the outstanding short-term bond balance was 70.9283 trillion won.

This content was produced with the assistance of AI translation services.