Xinhua, Seoul :
Corporate financing in South Korea fell last month as borrowing costs went up on rising expectations for the policy rate hike, financial watchdog data showed Thursday.
Issuance by local companies of stocks and bonds reached 14.57 trillion won (13 billion U.S. dollars) in May, down 24.1 percent from a month earlier, according to the Financial Supervisory Service.
The double-digit decline came as market rates picked up on expectations that the Bank of Korea (BOK) would raise its benchmark rate in the near future following the U.S. Federal Reserves rate increase.
The Fed lifted its target rate in June to a range of 1.75-2.00 percent, after increasing it in March by 25 basis points.
The BOK refrained from altering its policy rate since it raised the rate to 1.50 percent in November last year, marking the first rate hike in almost six and a half years.
Corporate bond sales dipped 18.6 percent from a month earlier to 14.4 trillion won (12.8 billion U.S. dollars) in May.
Bonds issued by industrial companies plunged 37.3 percent, with those by financial institutions falling 3.4 percent. The issuance of asset-backed securities (ABS) plummeted 45.7 percent. Equity financing, which includes rights offering and initial public offering (IPO), tumbled 88.7 percent on low demand for IPOs.
Corporate financing in South Korea fell last month as borrowing costs went up on rising expectations for the policy rate hike, financial watchdog data showed Thursday.
Issuance by local companies of stocks and bonds reached 14.57 trillion won (13 billion U.S. dollars) in May, down 24.1 percent from a month earlier, according to the Financial Supervisory Service.
The double-digit decline came as market rates picked up on expectations that the Bank of Korea (BOK) would raise its benchmark rate in the near future following the U.S. Federal Reserves rate increase.
The Fed lifted its target rate in June to a range of 1.75-2.00 percent, after increasing it in March by 25 basis points.
The BOK refrained from altering its policy rate since it raised the rate to 1.50 percent in November last year, marking the first rate hike in almost six and a half years.
Corporate bond sales dipped 18.6 percent from a month earlier to 14.4 trillion won (12.8 billion U.S. dollars) in May.
Bonds issued by industrial companies plunged 37.3 percent, with those by financial institutions falling 3.4 percent. The issuance of asset-backed securities (ABS) plummeted 45.7 percent. Equity financing, which includes rights offering and initial public offering (IPO), tumbled 88.7 percent on low demand for IPOs.
