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Above par (Value):
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The price of a stock or bond, higher than its face value.
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Account Day:
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The day identified by stock
and commodity exchange for the settlement of accounts between members...
Synonymous with settlement day.
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Accrued Dividend:
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The customary regular
dividend considered to be earned but not declared or payable on legally issued
stock or other instruments of part ownership of a legally organised business or financial institution.
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Accrued Interest (AI):
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A bond’s accumulated
interest made since the last interest payment. The purchaser of the bond pays the
market price plus accrued interest.
Bonds that are in default and income bonds are exceptions.
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Active Stocks:
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Those securities for which
the highest number of bargains have been recorded. For this purpose The Stock Exchange
compiles a table of such active stocks.
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Ad. Valorem:
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This latin
expression means “according to value”. Under the Stamp Act, an
ad valorem duty is paid by the buyer of
securities.
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Allotment:
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The part of a stock issue apportioned
or assigned by an investment firm to a purchaser or subscriber.
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Allotment Letter:
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It is a communication received by an investor from a company
or from an issuing house responsible for the issue of new capital by the
company, indicating that an allotment of shares has been made. It also indicates the number and the
value of shares.
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Arbitrage:
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The simultaneous purchase and sale of mortgages,
future contracts, or mortgage-backed securities in different markets to
profit from price differences.
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Asked (Asking) Price:
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The price at which a stock is offered for sale. In open-end shares, the price at
which the purchaser may buy stock from the investment firm. In closed-end shares, the lowest
price at which the stock is offered for sale in the market. Synonymous with offering
price.
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Bargain:
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A deal on The Stock
Exchange.
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Bearish And Bullish:
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When conditions suggest
lower prices, a bearish situation is said to exist. If higher prices appear warranted,
the situation is said to be bullish.
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Below par:
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At a discount; less than
face value.
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“Blue Chip”:
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An American expression used
to describe equity shares of the highest investment calibre.
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Bonus Issue:
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It means that issue of
shares by a company to its share holders in proportion to their existing
holdings. It is made by capitalising existing
reserves, which already be long to the shareholders and is merely the
formal recognition of the increase in the capital invested by those
shareholders through the ploughing back of
previous profits.
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Bonus Stock:
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Securities given most often
to top management and other employees as a bonus.
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Boom:
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When business expands and
the value of commodities and securities increases.
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Bull:
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One who expects that price
will rise.
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Call:
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(i) Investments:
To demand payment of an installment of the price of bonds or stocks that have been subscribed.
(ii) Options: The right to purchase a given number
of shares at a stated priceon a fixed date.
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Closing of Books (Register):
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It is a period when a
distribution of any kind is to be made. To be decided by a Company on
consultation with the Stock Exchange. It is fixed to enable the Registrar
determine shareholders that would benefit from any bonus and/or dividend
declared by the quoted company.
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Collateral Security:
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Any security put up to
reinforce an obligation.
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Common Stock (CS):
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Securities that represent an
ownership interest in a corporation.
If the company has also issued preferred stock, both common and
preferred have ownership rights. The preferred, normally, is limited to a
fixed dividend but has prior claim on dividends and in the event of
liquidation, assets. Claims of both common and preferred stockholders are
junior to claims of bond-holders or other creditors of the company. Common stockholders assume the
greater risk but generally exercise a greater degree of control and may
gain the greater award in the form of dividends and capital
appreciation. Often used
interchangeably with capital stock.
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Common Stock Index:
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Compilation showing the
average current market value of common stock compared with their average
market value at an earlier, base period.
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Contract Note:
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An acknowledgement forwarded
to a client by a brokerage house verifying the transaction made on the
client’s behalf. The slip
includes the name of the stock number of traded shares, whether bought or
sold, price per share, commission and fees, and the net Naira amount of the
transaction.
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Convertible Debentures:
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Like Bonds, these carry a
fixed interest rate and have a set maturity date. They may be traded in for a given
amount of stock at any time at the option of the investor. The issuer, however, has the right
to call them in, to be redeemed either in cash or for common stock.
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Coupon:
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(i) Bonds:
The portion of a bond that is redeemable at a given date for interest payments.
(ii) Securities: The interest rate on a debt
security the issuer promises to pay to a holder at maturity, expressed as
an annual percentage of face value.
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Date of Maturity:
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The date on which a debt
must be paid. Usually applied
to those debts evidenced by a written agreement, such as a note bond, and
so on.
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Debenture:
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(i) Used
to describe indebtedness, usually in long-term obligations, which is unsecured.
(ii) A corporate obligation that is sold
as an investment.
(iii) A voucher or certificate acknowledging that
a debt is owed by the signor.
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Debt Securities:
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Fixed obligations that evidence a debt, usually
repayable on a specified future date or dates and which carry a specific
rate or rates of interest payable periodically. They may be non-interest bearing
also.
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Deduction Of Dividend:
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The subtracting of the dividend content from the
price of stocks when these are sold ex-dividend.
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Delivery:
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The handing over of possession of shares certificates
on a delivery day.
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Depreciation:
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It means reduction in value. In accountancy, the application of
revenue to the writing down of the value in the books.
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“Differences”:
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The balances of sums due to brokers and clients at
the end of an Account.
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Dividend (Div):
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That part of a company’s profit which the
Directors decided to distribute to shareholders. It is generally expressed
as a percentage of the nominal value of the capital to which it relates.
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Dividend Per Share (DPS):
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The naira amount of dividends paid to stock holders
for each share owned of a corporation’s common stock.
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Dividend Warrant:
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Any order to release a corporation’s dividend
to its rightful shareholders.
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Dividend Yield:
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A stock’s dividend share dividend by its market
price per share.
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Equity Capital:
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Stockholder’s or owners investments made in an organisation.
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Equity Earnings:
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A portion of surplus earnings of a subsidiary
company, over dividend payments that are unreported by the parent company.
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Equity Securities:
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Any stock
issue, common or preferred.
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Ex-Dividend (ex div; XD):
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Identifying the period during which the quoted of a
security excludes the payment of any declared dividend to the buyer, and
the dividend reverts to the seller.
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Ex-Dividend Date:
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The day on and after which the right to receive a
current dividend is not transferred automatically from seller to buyer.
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Ex-Rights:
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Without the rights, Corporations raising additional
money may do so by offering their stockholders the right to subscribe to
new or additional stock, usually at a discount from the prevailing market
price. The buyer of a stock selling ex-rights is not entitled to a share in
the issue being made.
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Ex-Rights Date:
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The date when a buyer of common stock is not entitled
to the rights that had been declared for the security.
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Floatation:
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The issue of a security by a new company or on behalf
of that company by an issuing house.
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“Fully-Paid Shares”:
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Shares whose full value or nominal value has been
paid up.
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Gilt-Edged:
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High grade stocks issued by corporations having a
known record for profit and payment of dividends and interest over the
years.
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Going Public:
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Describes a situation when a firm’s shares
become available on a major exchange, as distinguished from being held by a
few shareholders.
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Hammering:
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Inability by a broker to meet his financial
obligation. It is followed by “hammering”, i.e. the announcement
on the floor of the Stock Exchange that the individual (or firm concerned
is unable to comply with his bargains).
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High/Low Index:
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An index indicating yearly highs and lows on a moving
average basis; used to predict major pattern changes.
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Industrials:
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Securities of firms involved in the production and/or
sale of services or commodities.
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Indemnity:
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Compensation against loss; also security against
contingent loss.
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Insider Transaction:
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Purchasing or selling of securities by offers to
large shareholders or other key members in a corporation. The SEC rules
that such transactions must be reported to them within 10 days after the
close of the month in which the transactions are made.
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Institutional Investors:
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A company having substantial funds invested in
securities (e.g. a bank, labour union, college,
Provident Fund, Pension Fund).
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Issue Price:
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The price for a new security sold to the public,
determined by an underwriter or syndicate.
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Letter Of renunciation:
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The form attached to an allotment letter which is
sent out to shareholders by a company making an issue of shares which
renounces, or gives up, his entitlement to new shares in favour of another.
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Listed Securities (Stocks):
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Any bonds or stocks that have been admitted for
trading on a stock exchange and whose issues have complied in every way
with the listing requirements of the exchange.
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Listing:
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A stock or bond’s admission to trading rights
on a stock exchange based on its size, profitability, shareholders, and so
on.
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Lot:
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A quantity of shares, usually 100.
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Lists Closed:
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Date up to which applications for public issue of
share are accepted.
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Market Capitalization:
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The value of a firm as determined by the market price
of its issued and outstanding common stock.
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Market Position:
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Term applied to describe the supply and demand
relationship of a given security at a given price.
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Market Trend:
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The general direction, ignoring short term
fluctuation of price movements in the market.
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New Issue:
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A stock or bond sold by a corporation for the first
time. Proceeds may be issued to
retire outstanding securities of the company to finance new plant or equipment,
or to secure additional working capital.
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New Issue Market:
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The market for new issues of securities (as opposed
to the secondary market on securities already issued).
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Market Position:
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Term applied to describe the supply and demand
relationship of a given security at a given price.
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Market Trend:
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The general direction, ignoring short term
fluctuation of price movements in the market.
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New Issue:
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A stock or bond sold by a corporation for the first
time. Proceeds may be issued to
retire outstanding securities of the company to finance new plat or
equipment, or to secure additional working capital.
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New Issue Market:
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The market for new issues of securities (as opposed
to the secondary market on securities already issued).
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Odd Lots:
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A broken-and small number of shares arising out of company’s
issue of bonus or right shares usually less than 100 units.
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Over-Subscribed:
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Term applied in a public issue of shares when the
applications received are in excess of the number of shares offered to the
public.
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Pari
Passu:
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Literally (Latin) means on an equal step. It is used as synonym for
“with equal rights” or “having identical
qualities”.
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Price-Earnings (P/E) Ratio:
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The price of a share of stock dividend by earnings
per share for a 12 months period.
For example, a stock selling for 5.00 a share is said to be selling
at a price earnings ratio of 10:1.
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Primary Market:
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A market for new issues. Funds raised go to the
corporation.
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Quotation:
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The highest bid to buy and the lowest offer to sell a
security in a given market at a given time. For example, if you ask a broker for
a “quote” on a stock, the reply may be something like 451/4 to 45½. This means that 45.25 is the highest
price any buyer wanted to pay at the time the quote was given on the floor
of a stock exchange, and 45.50 was the lowest price any seller would take
at the same time. The word is
often shortened to quote.
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Rights:
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When a company wants to raise more funds by ensuing
additional securities, it may give its stockholders the opportunity, ahead
of others, to buy the new securities in proportion to the number of shares
each owns. The piece of paper
evidencing this privilege is called a right. Because the additional stock is
usually offered to stockholders below the current market price, rights
ordinarily have a market value of their own and are actively traded. In most cases they must be exercised
within a relatively short period.
Failure to exercise or sell rights may result in actual loss to the
holder.
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Secondary Market:
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The market where existing securities are
traded. Funds generated go to the selling shareholder.
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Scrip Certificate:
|
A certificate showing ownership of
a fractional shares of stock that can be converted into a full share
when presented in amounts equal to a full share.
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Scrip Dividend:
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A type of dividend issued by a corporation to its
stockholders, entitling the holder or bearer to receive cash, stock, or a
fractional share of stock, or one or more units of the product
manufactured, upon presentation or a specified future date.
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Shares:
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(i) A
unit of equity ownership in a corporation.
(ii) A unit of stock naming the
holder and indicating ownership in a corporation.
(iii) A unit of ownership in a mutual fund.
(iv) Interest, often represented by a
certificate, in general or limited partnership.
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Share Value:
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The face value, as opposed to the market value of a
share in company’s risk capital.
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Stage:
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A speculator on the Stock Exchange who subscribes to
a new issue not with the idea of holding as permanent investment the shares
allotted to him, but in the hope that he will be able to sell his allotment
at a profit as soon as dealing starts.
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Stamp Duty:
|
Tax levied on the purchase of Shares.
|
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Stock:
|
The legal capital of a corporation dividend into
shares.
|
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Tip:
|
Recommendation to buy or sell shares.
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Turnover:
|
The volume of business in security or the entire
market. If turnover on the
exchange is reported at 15
million shares on a particular day, this means that 15 million shares
changed hands. Odd lot turnover
is tabulated separately and ordinarily is not included in reported volume.
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Trustee:
|
A person administering a trust.
|
|
Underwriters:
|
An insurer.
One who undertakes, for a commission to apply for, all or part of
the shares in a new issue which are not taken up by the public.
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Unit Trust:
|
A portfolio of holdings in various companies,
divided into units and managed by professionals.
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