The Korean Inc. withheld equity offerings amid sluggish stock market while increasing debt issues to ride on the bond market rally amid renewed favorable lending environment.

According to the Financial Supervisory Service on Wednesday, stock issuance shrank 61 percent on year to 2.22 trillion won ($1.88 billion) in the first six months.

Initial public offering (IPO) jumped 52.8 percent to 834.8 billion won as 29 stocks newly joined the bourses during the period – two on the main stock index Kospi and the rest 27 stocks on the junior Kosdaq. Secondary offerings plunged 73.1 percent to 1.39 trillion won, with the number of companies issuing new shares dwindled to 14 from 20 amid the country’s lackluster stock market.

A year ago, Samsung Heavy Industries and Hyundai Heavy Industries raised 1.4 trillion won and 1.2 trillion won, respectively, via new share sales.

Companies turned to bond to raise funds instead as lending rates headed to record low levels. The country’s policy rate was lowered to 1.50 percent after the Bank of Korea earlier this month cut the rate by 25 basis points.

Companies sold total 96.1 trillion won worth of debt in the cited period, up 5.5 percent from the same period a year ago - 25.77 trillion won worth in corporate bonds,, up 24.1 percent on year and 53.12 billion won issues by financial institutions, up 0.8 percent. Asset-backed securities (ABS) issuance fell 11.2 percent to 7.21 trillion won worth.

Outstanding balance in corporate debt stretched to 503.06 trillion won as of the end of June, up 8.6 percent from a year earlier. Commercial papers issued from January to June rose 3.0 percent to 171.32 trillion won, whereas short-term bonds issuance declined 8.8 percent to 523.87 trillion won.

By Jin Young-tae and Lee Ha-yeon

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]