par

The title of this article is ambiguous. Further meanings are listed under Pari (disambiguation) .

Pari (from Latin par "equal, equal strength") is a technical term in banking and stock exchange for the stock market price of securities , which is identical to their nominal value .

General

For stocks , bonds and investment certificates there are two values, the nominal value (nominal value) and the stock market price. If both are identical, the two values ​​are "par":

${\displaystyle {\mbox{Nennwert}}={\mbox{Börsenkurs}}}$

As a rule, however, the nominal value and the issue price or the current stock exchange price differ from one another. These deviations are then called “above par” and “below par” in technical jargon.

"Above par" and "below par"

If the stock market price / issue price of a security is above its nominal value, one speaks of "above par":

${\displaystyle {\mbox{Nennwert}}<{\mbox{Börsenkurs}}}$

The difference between the nominal value and the stock exchange price is called the premium .

"Below par" is used when the stock exchange price is below the nominal value:

${\displaystyle {\mbox{Nennwert}}>{\mbox{Börsenkurs}}}$

The difference between the nominal value and the stock exchange price is called a discount .

emission

Whether and to what extent the subsequent market value of securities deviates from their nominal value depends in particular on the determination of their issue price. Issue price is the price at which securities are offered by the issuer when they are first offered on the stock exchange . In the case of bonds , the under- par issue is common, in the case of shares, however, it is prohibited under Section 9 (1) AktG in order to preserve the share capital . That is why there is only an over-par issue for stocks . Investment certificates are usually sold with an initial charge , ie "above par".

Effect on the return

In the case of fixed- rate bonds in particular , the deviation from “par” has an effect on the return, since the nominal interest rate on the bond only corresponds to the return if the bond is “par” . If the issue or current price of a bond is below its nominal value ("below par"), the yield is higher than the nominal interest rate and vice versa. Since the stock exchange price of a bond tends to approach the nominal value before the due date ( nominal value convergence ), the yield also adjusts to the nominal interest rate.

Others

• Acronym of the Philippine Music Association Kapisanan ng Industriya ng Plaka ng Pilipinas
• Synonyms for pari are al pari and parikurs .