US Tightening Bear Market... Corporate Funding Market Also 'Frozen'
[Asia Economy Reporter Ji Yeon-jin] Due to the impact of U.S. monetary tightening, the value of domestically listed companies has plummeted, significantly reducing fundraising through the stock market.
According to the corporate direct financing performance for May announced by the Financial Supervisory Service on the 23rd, companies raised a total of 19.4156 trillion KRW last month, including 742.3 billion KRW in the stock market and 18.6733 trillion KRW in the corporate bond market. This represents a 3.5% (696.1 billion KRW) decrease compared to the previous month.
In the stock market, initial public offerings (IPOs) increased compared to the previous month, but due to the base effect from Samsung Biologics' 3.2 trillion KRW rights offering in April, the amount decreased by 78.7% month-on-month. There were four IPOs (641 billion KRW) including Daemyung Energy, Gaon Chips, Hana Financial No.22 Special Purpose Acquisition Company, and Cheongdam Global, marking a 53.5% increase from the previous month. Rights offerings amounted to 643.9 billion KRW, including KOSPI-listed Solus Cheomdam Solution and KOSDAQ-listed companies Hantop and STQ.
Corporate bonds recorded 18.6733 trillion KRW, a 12.4% increase from the previous month. General corporate bonds amounted to 2.143 trillion KRW, a decrease of 2.857 trillion KRW (57.1%) compared to the previous month (46 cases, 5 trillion KRW), but financial bonds (15.552 trillion KRW) increased by 54.0% (5.4528 trillion KRW).
As of the end of last month, the total outstanding corporate bonds stood at 633.0989 trillion KRW, an increase of 2.59 trillion KRW compared to the previous month (630.5089 trillion KRW), with general corporate bonds shifting to net redemption due to decreased issuance.
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On the other hand, the total issuance of convertible bonds (CP) and short-term bonds reached 152.3769 trillion KRW (CP 38.3961 trillion KRW, short-term bonds 113.9808 trillion KRW), an increase of 15.0734 trillion KRW (11.0%) compared to the previous month. CP issuance totaled 38.3961 trillion KRW, increasing by 1.9719 trillion KRW (5.4%) from the previous month (36.4242 trillion KRW).
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