Sales of South Korea’s corporate bonds hit a record high in the first half of the year, as low interest rates prompted companies to sell more debt, data showed on July 8.
The corporate debts floated in the January-June period, including bank bonds and asset-backed securities, stood at 48.8 trillion won ($41.5 billion), up 12.7 percent from a year ago, according to the data by the Korea Financial Investment Association.
It was the largest corporate offerings on a half-year basis, the association said. The sharp increase was attributed mainly to low interest rates that prompted companies to aggressively sell debts and investors to buy new bonds.
The strong gain in corporate bond issuance also came after the nation’s economy showed signs of further losing momentum over a protracted trade dispute between the United States and China.
Last week, the government cut its economic growth outlook this year to between 2.4 percent and 2.5 percent, from its previous forecast of between 2.6 percent and 2.7 percent. Korea’s exports fell 13.5 percent on-year to $44.18 billion in June, extending their on-year decline for the seventh consecutive month.
The corporate bond market was also buoyed by hopes that the Bank of Korea may cut its key rate in the coming months.
By Ram Garikipati and newswires (email@example.com)