Investor sentiment in the corporate bond market is also mixed due to the booming stock market. Money is flocking to securities companies’ bonds that are expected to benefit from the stock market boom. On the other hand, only demand that barely exceeds the target amount is observed in the issuance of new capital securities, a financial holding bond that was in the spotlight for high interest rates in the past.
According to the investment bank (IB) industry on the 24th, Korea Investment & Securities conducted a demand forecast for institutional investors to issue 250 billion won worth of corporate bonds on the 21st. At that time, the total number of orders bid by institutions was 2.495 trillion won, about 10 times the amount of recruitment.
Korea Investment & Securities Co. drew funds from institutional investors with excellent creditworthiness and a record-high performance in the first quarter of this year. The company broke all-time highs in the first quarter, recording 959.9 billion won in consolidated operating profit and 784.7 billion won in net profit.
On the other hand, Hana Financial Group’s demand forecast for new capital securities, which was conducted on the same day, was only 320 billion won in total bidding for 270 billion won in issuance. The issuance is not unreasonable, but it contrasts sharply with the heated investor sentiment toward securities bonds.
The strength of securities bonds compared to new capital securities of financial holdings has been remarkable recently. Last month, Hana Securities and Kiwoom Securities issued 200 billion won and 300 billion won in corporate bonds, respectively. Even in the demand forecast conducted at the time, orders of more than six and eight times the amount of recruitment were poured out, respectively. On the other hand, KB Financial Group’s demand forecast for new capital securities worth 405 billion won this month only received 433 billion won in orders.
This temperature difference seems to be due to differences in business conditions. Analysts say that as securities firms have posted a series of good performances, bets on securities firms are also increasing in the corporate bond market. Another reason is that new capital securities are less attractive in a high-interest-rate environment.
[Reporter Oh Goes Back]
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