Base price is the price used as the basis for determining the price limitations of stocks, ETFs, and beneficiary certificates for the day. In the KRX market, the previous day's closing price is generally the base price. As such, price fluctuation limits for the day is 30% higher and lower than the previous day's closing price.
주의Closing prices mean the prices lastly traded at the regular session. If there was not a trade during the previous day, the base price of the previous day is deemed as the closing price.
However, in cases where there is a corporate action such as capital increase by new shares (excluding the 3rd party allocation method and the public offering method), bonus stock, stock dividend, stock split, reverse stock split, etc., it is needed to reflect to the base price the changed value of securities issue before and after the corporate action. Therefore, it this case, the KRX adjusts the base price to an appropriate theoretical price calculated through a certain formula.
For a stock of which previous closing price is KRW 10,000 and having a stock split of 1:10, the next day's base price will be adjusted to KRW 1,000. If the total shares issued are 1,000 shares before the split, the total shares will be 10,000 after the split and therefore, the adjustment in that base price makes the market capitalization the same.
주의Market capitalization before the split: KRW 10,000 x 1,000 Shares = KRW 10,000,000In case where the previous day's closing price is not available or it is difficult to calculate the appropriate theoretical price in such cases as capital reduction, relisting and listing change after corporate spin off, and etc., 'Opening Price Method' is applied where the opening price determined in the market through a single price call auction is adopted as the base price for the day. In this case, the first price executed by the bid and ask orders received within a certain range of prices during the call auction period from 08:30 to 09:00 is adopted as the base price. After determining the base price at 09:00, trade matching is conducted like any other issues within the daily price limits based on that base price. However, in the case of newly listed stocks that were subject to the 'Opening Price Method', as part of 『Measures to Improve soundness of IPO Market』, the 'Opening Price Method' is no longer applied. Instead, the public offering price(issue price at the time of offering or sales) is applied as the base price on the first trading day, and the price limit of 60~400% of the base price is applied on the day of the new listing.
For those issues applying opening price method, the price range of orders placed to determine the first price (base price) is set wider than usual so that the equilibrium price is easy to find. Also, to prevent price distortion from too wide price range, the KRX sets an appropriate appraisal price and the range of quotation prices.
The appraisal price refers to the price that serves as the basis for the price range of quotations that can be submitted in the first price call auction upon relisting, listing transfer, or resumption of trading after a suspension of more than 30 days. For instance, in the case of stock that is resumed from suspension for more than 30 trading days, its price range is limited to 50% ~ 200% of the appraisal price. In this case, the appraisal price of KRW 10,000 means the quotation price that can be submitted to determine the first price are limited within the range of KRW 5,000 ~ KRW 20,000.
| Classification | Base Price | Price Range | |
|---|---|---|---|
| Newly Listing | General stocks | Public offering price | 60%~400% |
| Holding company (holding a listed company as a wholly-owned subsidiary) | (Sum of market capitalization by share class of wholly-owned subsidiary on the last trading day + total net asset value by share class of the wholly owned unlisted subsidiaries) / total number of shares of all the share classes | 60%~400% | |
| Other Stocks | Net asset value per share | 60%~400% | |
| Issues | Appraisal Price | Quotation Price Range | Issues |
|---|---|---|---|
| Relisting and listing change | Relisting of new companies incorporated by spin-off and merger after spin-off and listing change of existing companies | In case where the net asset values of issues applying for the listing change and relisting are positive (+):
|
50%~200% However, in case where a large sum of shares are issued via capital increase by the allocation to a third party, merger, transfer of business assets, etc., KRW 1~200% |
| In case where the net asset values of the listing change and relisting issues are not positive: | |||
| Relisting issue: no appraisal price | KRW 1~last trading day's closing price | ||
Listing change issue:
|
50%~200% KRW 1~(market capitalization before spin-off / number of shares of the new company) |
||
| Merger between listed companies establishing a new company | Total market capitalization of all the share classes as of the last trading day before the merger / total number of shares of all the share classes after the merger | 50%~200% | |
| Listing change after capital decrease |
|
50%~150% However, in case where a large sum of shares are issued at a low price via capital increase by the allocation to a third party, merger, transfer of business assets, etc., KRW 1~150% |