[Featured Stock] Jogwang ILI Hits Upper Limit Due to 'Rights Issue Ex-Rights Effect'

On the 14th, dealers are working in the dealing room of Hana Bank in Euljiro, Seoul. On this day, the KOSPI index opened at 2316.41, down 12.20 points (0.52%) from the previous session. The won-dollar exchange rate started at 1306.5 won, down 0.4 won. Photo by Moon Honam munonam@

[Asia Economy Reporter Ji Yeon-jin] Jogwang ILI recorded a limit-up on the 14th due to the visual illusion effect caused by the ex-rights date of a free stock dividend.

Jogwang ILI is trading at 2,775 KRW, up 640 KRW (29.98%) from the previous day’s closing price since the market opened. Previously, Jogwang ILI decided on a free stock dividend of 5 shares per 1 share, and the ex-rights date occurred on this day.

The ex-rights date means that after the new stock allocation record date passes, the right to subscribe to new shares disappears, and to maintain fairness between existing and new shareholders, the opening price is artificially lowered according to certain criteria.

When the ex-rights date of a free stock dividend occurs, there is no change in corporate value or growth potential, but the stock price drops significantly compared to usual, creating a visual illusion that the corporate value is undervalued, which attracts buying demand.

Jogwang ILI is a manufacturer of industrial valves, producing and selling special valves and general valves used in shipbuilding equipment, nuclear reactor facilities, petrochemical plants, and semiconductor equipment. Its main product is safety valves (safety devices that automatically regulate fluid flow using the valve’s own force).

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