SEOUL, Corporate direct financing in South Korea shrank 3.5 percent on-month in May due in part to the base effect from the previous month's large-scale rights issue, data showed Friday.

Local companies raised a combined 19.4 trillion won (US$14.9 billion) by selling stocks and bonds last month, compared with 20.1 trillion won tallied the previous month, according to the data from the Financial Supervisory Service.

Direct financing refers to raising funds directly from the stock and bond markets without borrowing from banks or other financial institutions.

Stock sales shrank 78.7 percent on-month to 742.3 billion won in May.

The steep decline is due mainly to the base effect from the previous month's massive 3.2 trillion-won stock sale by Samsung Biologics, the biotech arm of South Korea's top conglomerate Samsung Group.

Corporate bond sales, however, grew 12.4 percent on-month to 18.7 trillion won, the data showed.

Source: Yonhap News Agency