In the first half of the year, capital raised by domestic corporations through direct financing significantly increased. Although initial public offerings (IPOs) and paid-in capital increases decreased, the impact of the largest ever issuance of corporate bonds on a semi-annual basis was realized.
The Financial Supervisory Service noted that in the first half of the year, corporations raised funds totaling 149.9324 trillion won through the issuance of stocks or corporate bonds, an increase of 11.6100 trillion won (8.4%) compared to the same period last year.
Direct financing refers to the method by which companies raise funds by directly issuing stocks or bonds without going through financial institutions.
In the first half of the year, the scale of fundraising through stocks was 4.2337 trillion won, a decrease of 841.7 billion won (16.6%) compared to the same period last year. There were a total of 42 IPOs raising 1.4492 trillion won, reflecting a decrease of 12 cases and 117 billion won in terms of number and amount respectively. This year, LG CNS was the only company that raised over 1 trillion won in IPOs.
Paid-in capital increases were carried out 24 times, raising 2.7846 trillion won, an increase of one case compared to the same period last year, while decreasing by 724.6 billion won. The average scale of fundraising per paid-in capital increase during the same period last year was 152.6 billion won, but it decreased to 116 billion won this year.
General corporate bonds totaled 366 cases, with 37.8320 trillion won issued, an increase of 47 cases and 4.3125 trillion won compared to the same period last year.
The FSS explained, "The issuance for refinancing purposes accounted for most of the general corporate bond issuance," adding that "the purpose for facility funds remained at its lowest level in the past five years in terms of scale and proportion."
Financial bonds amounted to 1,347 cases with 97.3876 trillion won issued, showing an increase of 4.9648 trillion won (5.4%) during this period. The total balance of corporate bonds reached 702.2144 trillion won, an increase of 44.0710 trillion won compared to the end of the first half of the previous year.
CPs and short-term bonds amounted to 757.7414 trillion won issued, reflecting an increase of 160.3779 trillion won (26.8%) compared to the same period last year. During this period, CPs increased by 37.9152 trillion won, and short-term bonds increased by 122.4647 trillion won (30.8%).