On the 23rd morning, Daehan Steel Co., Ltd. shares are up more than 14%.
As of 9:26 a.m. that day, Daehan Steel Co., Ltd. was trading on the main board at 22,600 won, up 2,900 won (14.72%) from the previous session. Right after the open, it climbed to 24,900 won, hitting a 1-year high.
Daehan Steel Co., Ltd. said after the regular session close the previous day that it decided on a bonus issue. It will allocate 0.66 new shares per one common share. The new shares will be funded with additional paid-in capital. With this bonus issue, the number of Daehan Steel Co., Ltd. shares will increase from 22,914,397 to 34,371,596.
The record date for the bonus issue is Jan. 6 next year. The scheduled listing date is Jan. 26.
A bonus issue does not change the overall corporate value. However, as existing shareholders' share counts increase, a price illusion that the stock has become cheaper can occur, and the share price tends to rise. It also gives the impression that the company's financial structure is sound enough to fund capital with retained earnings.