Corporate direct financing in South Korea plunged nearly 44 percent in February from the previous month due mainly to a base effect, data showed Thursday.

Local companies raised a combined 15.5 trillion won ($12.7 billion) by selling stocks and bonds last month, down 43.7 percent from January, 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 and other financial institutions.

Stock sales nose-dived 86.6 percent on-month to 1.4 trillion won due to the impact of a massive stock sale conducted in January.

Last month, LG Energy Solution Ltd., South Korea's top car battery maker, made its debut on the country's main stock market by selling shares worth 10.2 trillion won to investors.

Bond sales sank 17 percent on-month to 14.1 trillion won in February because of a base effect and concerns over rising interest rates.

Local companies tend to float a large amount of bonds in January. In mid-January, the central Bank of Korea (BOK) raised the country's policy rate by a quarter percentage point to 1.25 percent, the third rate increase since August.

As of end-February, the value of outstanding corporate bonds came to 630.3 trillion won, up 0.1 percent from a month earlier.

The data also showed that local firms issued commercial paper and short-term bonds worth 124.6 trillion won last month, down 12.2 percent from the previous month. (Yonhap)