South Korean companies' direct financing declined 16 percent in May from the previous month due to a fall in share sales, the country's financial watchdog said Thursday.

Local firms raised 12.3 trillion won (US$11.5 billion) by issuing stocks and bonds last month, compared with 14.7 trillion won the previous month, according to the Financial Supervisory Service.

In the January to May period, local companies' direct financing rose 18 percent on-year to 60.9 trillion won, it added.

In May, corporate share issuance stood at 1 trillion won, down 33.9 percent from April mainly because of an absence of massive share sales. In April, Shinhan Financial Group issued new shares worth 1.1 trillion won.

Meanwhile, the sale of corporate bonds fell 13.9 percent on-month to 11.3 trillion won in May, the watchdog said.

The issuance of asset-backed securities plunged 58.4 percent to 717.1 billion won. Asset-backed securities are bonds or notes backed by assets consisting of debt obligations such as car loans, home equity loans, credit card receivables and student loans.

Source: Yonhap News (June 23, 2011)