South Korea's corporate financing rises in April, industriy falls
Staff Writer |
Corporate financing in South Korea rose last month as companies rushed to sell stocks and bonds amid the record-low interest rates, financial watchdog data showed Wednesday.
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Stock issuance surged to 2.85 trillion won (2.54 billion U.S. dollars) in April from 979 billion won in the previous month, according to the Financial Supervisory Service (FSS).
The bond sales increased from 10.32 trillion won to 16.98 trillion won in the cited period as bond issuance surged amid the expected rate hike by the central bank.
The Bank of Korea (BOK) cut its benchmark interest rate from 3.25 percent in July 2012 to an all-time low of 1.25 percent in June last year.
Pressures grew on the BOK to raise its record-low policy rate amid the expected rate increase in the United States as early as next month.
The U.S. Federal Reserve lifted its policy rate to a range of 0.75-1.00 percent. If the U.S. benchmark rate is raised in the near future, its upper end would be identical to South Korea's policy rate and may cause an abrupt foreign capital exodus from the South Korean financial market.
South Korea's industrial production fell last month on weak demand for semiconductor that offset the recovery in private consumption, a government report showed Wednesday.
Production in all industries reduced 1 percent in April from a month earlier, according to Statistics Korea. It was a downturn from a 1.3 percent increase in March, marking the fastest decrease in 15 months
Output in the mining and manufacturing sectors declined 2.2 percent, leading the April reduction.
Semiconductor production tumbled 9.2 percent on soft demand from China, South Korea's biggest trade partner. Auto production also slumped 2.6 percent.
Services industry production inched up 0.1 percent.
Inventory among manufacturers grew 2.7 percent. Manufacturers posted a factory utilization rate of 71.7 percent in April, down 1.1 percentage point from the previous month.
Retail sales increased 0.7 percent in April after falling 0.1 percent in the previous month. It was mainly attributable to the expected launch of a new government.
Facility investment dipped 4 percent, but machinery orders posted a double-digit growth on demand from public and electronics sectors. ■