Due to base effects, October stock issuance plummets 85%... Corporate bond issuance also down 10%

Financial Supervisory Service, Yeouido, Seoul. Photo by Jinhyung Kang aymsdream@

Last month, the issuance of stocks by domestic companies significantly decreased. Due to the rise in market interest rates, corporate bond issuance also showed a declining trend. On the other hand, both commercial paper (CP) and short-term bonds saw an increase in issuance volume compared to the previous month.

According to the "October 2023 Corporate Direct Financing Performance" announced by the Financial Supervisory Service on the 21st, the total issuance volume of stocks and corporate bonds was 19.4151 trillion KRW, down 18.3% from the previous month. Stock issuance amounted to 412.9 billion KRW, and corporate bond issuance was 19.0022 trillion KRW.

Stock issuance decreased by 84.7% compared to the previous month due to a base effect from large-scale paid-in capital increases by SK Innovation, CJ CGV, and others in September. Initial public offerings (IPOs) totaled 10 cases worth 225.9 billion KRW, down 371.4 billion KRW (62.2%) from 9 cases worth 597.3 billion KRW the previous month. Paid-in capital increases were 5 cases totaling 187 billion KRW, a sharp drop of 1.9166 trillion KRW (91.1%) compared to 11 cases worth 2.1036 trillion KRW the previous month.

Corporate bonds decreased by 9.8% due to the impact of rising market interest rates. Both general corporate bonds and financial bonds declined compared to the previous month. General corporate bonds amounted to 31 cases worth 2.469 trillion KRW, down 735 billion KRW (22.9%) from 36 cases worth 3.204 trillion KRW the previous month. Financial bonds recorded 250 cases totaling 12.8993 trillion KRW, down 3.2436 trillion KRW (20.1%) from 284 cases worth 16.1429 trillion KRW the previous month. Asset-backed securities (ABS) increased by 1.9035 trillion KRW (110.0%) to 3.6339 trillion KRW from 76 cases worth 1.7304 trillion KRW the previous month, with 185 cases issued. As of the end of last month, the total outstanding corporate bonds stood at 632.4776 trillion KRW, up 82.72 billion KRW (0.1%) from 631.6504 trillion KRW the previous month.

Issuance of CP and short-term bonds totaled 119.663 trillion KRW, up 20.5339 trillion KRW (20.7%) from 99.1291 trillion KRW the previous month. As of the end of last month, the outstanding balances of CP and short-term bonds were 199.5888 trillion KRW and 72.6548 trillion KRW, respectively.

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