Corporate direct financing dips over 22 pct in March on sharp drop in bond issuance

Corporate direct financing in South Korea shrank more than 22 percent from a month earlier in March due to a sharp decline in corporate bond issuances, data showed Sunday.Local firms raised a combined 20.5 trillion won (US$14.86 billion) by selling stocks and bonds last month, down 22.5 percent from the previous month, according to the data from the Financial Supervisory Service.Direct financing refers to raising funds directly from the stock and bond markets without borrowing from banks and other financial institutions.Stock issuances jumped more than sevenfold to over 1.9 trillion won from 242.8 billion won over the cited period, but bond sales tumbled 29 percent on-month to 18.62 trillion won from 26.23 trillion won, according to the released data.The value of outstanding corporate bonds stood at 655.86 trillion won as of end-March, up 2.19 trillion won from a month earlier.Local businesses issued 27.3 trillion won worth of commercial papers in March, down 7.23 trillion won, or 20.9 percent, fro m a month earlier.They also issued 63.2 trillion won worth of short-term bonds, up 790 billion won, or 1.3 percent, from a month before.Source: Yonhap News Agency