Stock, bond issues by Korean Inc. hit all-time high in H1

2021.07.20 11:34:52 | 2021.07.20 12:57:50

[Photo by Lee Chung-woo]이미지 확대

[Photo by Lee Chung-woo]

Stock and bond offerings by Korean Inc. hit an all-time high in the first half as companies rushed to raise securities while market conditions were still favorable, data showed.

According to data released by the Financial Supervisory Service on Tuesday, securities issuance came to record 122.76 trillion won ($106.66 billion) as of June, up 34.2 percent from a year ago.

Stock issues amounted to 12.63 trillion won, soaring 486.9 percent on year and nearly doubling the last record 6.6 trillion won set in 2011.

Initial public offerings expanded 197 percent on year to 3.17 trillion won, largely owing to blockbuster 994.5 trillion won IPO by vaccine maker SK Bioscience Co. and 898.4 billion won IPO of battery material maker SK IE Technology Co. There were 49 IPOs in the first half.

Rights offering also soared 773 percent against a year prior to 9.46 trillion won. The bulk came from large caps on the Kospi including Korea Air Lines Co., Posco Chemical Co. and Hanwha Solutions Corp.

“The stock market boom has led to a surge in IPOs and rights offering by major companies,” an FSS official said. Stocks have been enjoying a flux of capital in the prolonged record low interest rate environment.

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Issuance of corporate bonds in the January-June period totaled 110.13 trillion won, gaining 23.2 percent from last year’s record high of 89.35 trillion won, as companies rushed to the debt market before interest rates went higher.

The issues were mostly in mid-to-long dated papers for repayment of maturing debts, with 27.8 percent sold by A or below investment grade issuers. Lower grade bond issues expanded 8.1 percentage points compared to a year ago on investors’ strong risk appetite for high-yield bonds.

The corporate bond balance as of end-June reached 607.82 trillion won, up 11.3 percent against a year ago.

Commercial paper issues and short-term debenture issuance climbed 11.5 percent and 12.2 percent on year, respectively, to 181.82 trillion won and 577.33 trillion won.

By Lee Soo-min

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