| AGM: |
Annual General Meeting. This is an annual meeting
where shareholders formally approve the director's actions on their behalf
during the past financial year and adopt the annual reports and accounts.
It is also the meeting at which the directors generally retire and are
formally appointed. |
| AIM: |
Alternative Investment Market. One of the Stock
Exchanges for dealing of shares or, usually, smaller companies. |
| Banner: |
Abbreviation of 'Banner Advertisement'. A graphic or
image used for advertising on the internet. |
| Bear: |
A person who expects prices of shares, and
consequentially the value of the stock market itself, to fall. |
| Bid Price: |
The price in the market which a prospective seller
is prepared to accept to sell the shares. The higher of the prices in the
bid to offer spread. The price paid when you buy the shares and the
existing shareholder accepts the Bid to buy them. |
| Blue Chip: |
The largest companies traded on the stock exchange.
The constituents of the FTSE100 Index of largest companies. The most highly
valued and reputable companies on the stock exchange. |
| Bonds: |
Debt instrument issued by a company or other
borrower instead of shares, as a way to raise finance. Can be listed on the
stocks exchange and traded like shares. |
| Bonus Issue: |
The issue of new shares to an existing shareholder,
but at no extra cost. A means for a company to distribute historic retained
profits to shareholders. |
| Broker Forecast: |
Brokers estimate the future performance of a company
usually based on key indicators: pre-tax profit, EPS and DPS. Two future
year estimates are shown for each company (the current and the next
financial period). These figures are used to calculate the forecast
consensus of all brokers for an individual company. |
| Bull: |
A person who expects the price of shares and
consequently the value of the stock market itself to rise. |
| Close Period: |
The period, generally of two months, prior to the
company's release of its interim or preliminary result, when the directors
are not permitted to trade in the company shares. |
| Company: |
The separate legal entity in which an investor is
able to acquire a share stake representing his part ownership of a
business. |
| Cookies: |
Small files that are downloaded onto a computer from
a website to a visitor's pc. Cookies hold information that can be retrieved
by other web pages on the site. |
| Dividend: |
The payment by the company to its shareholders of a
proportion of the profits earned during the financial period. Usually paid
as an interim dividend at mid year and a final dividend once the final
business accounts are prepared and the results are known. |
| Earnings: |
The profits earned by the company during the
financial period, which is available to pay dividends. Usually expressed on
a per share basis as earnings per share (EPS) and used as the key element
of the price per earnings ratio (PER or P/E ratio) in judging comparative
values. |
| EGM: |
Extraordinary General Meeting. A meeting where the
shareholders discuss and approve special matters proposed by the directors,
such as approval of a take over, or major acquisition. |
| Employee Stock Ownership Plan (ESOP): |
A trust established by a company for the allocation
of some of its shares to its employees over time, intended to motivate
employees, and often providing tax benefits to the company. Also called a
stock option plan or a purchase plan. |
| Equity: |
The voting capital in the company, represented by
the ordinary shares. |
| EX: |
Used to indicate that the share is currently
available in the market with a lack of certain specific rights and
conditions. This might be ex dividend (XD) where the purchaser is not
entitled to the next declared dividend or ex rights (XR) where the holder
is not able to participate in the proposed new share issue by the company
to existing holders on preferential terms. Also see C.U.M. |
| Exercise: |
To implement the rights of an option, by buying (in
the case of call options) or selling (in the case of put options) the
underlying asset. |
| Final Results: |
The announcement and publication of the company's
financial results for its latest business period, or financial year, in the
form of the annual report and accounts. See also prelims. |
| Flipping: |
The practice by some institutional investors of
buying initial public offerings at the offering price and then reselling
them to retail investors once trading has begun, usually for a substantial
profit. |
| Fund Manager: |
A professional investor, typically in an insurance
company, pension fund, investment or unit trust. |
| In The Money: |
Situation in which an option's strike price is below
the current market price of the underlier (for a call option) or above the
current market price of the underlier (for a put option). Such an option
has intrinsic value. |
| IPO: |
The first time a company sells new stock, and
differs from the secondary offering, which is a public sale of previously
issued securities, usually held by insiders. |
| Institutional Investor: |
Entity with a large amounts to invest, such as
Investment and Unit Trusts, Insurance Companies, Pension Funds, Investment
Banks and Endowment Funds. Institutional Investors are covered by fewer
protective regulations because it is assumed that they are more
knowledgeable and better able to protect themselves. They account for a
majority of overall volume traded and the value of shares held. Also see
Fund Manager. |
| Interim: |
The results covering part or the companies financial
year, usually the first six months, and the dividend paid to shareholders
out of the profits, or earnings, of that period. |
| Investment Manager: |
See also Fund Manager. |
| LSE: |
London Stock Exchange. |
| Market Capital: |
The total stock market value of a company's shares,
being the total number of shares issued to shareholders multiplied by the
current share price. |
| Market Maker: |
The Stock Exchange firms that stock brokers deal
with in completing a transaction. The market middleman from whom you buy,
or to whom you sell the shares in the company, if a SEAQ stock. |
| Market Price: |
The price at which the share can currently be traded
in the market. |
| Market Value: |
See Market Capital. |
| Merger: |
The arrangement by which by which two companies
unite without one attaining direct control over the other. |
| Mid Price: |
The normal price quoted in the press for the
company's shares, being the mid point between the bid and offer spread. |
| New Issue: |
Same as IPO or placing. |
| Nominee: |
A person, or company, in whose name the shares are
held, but who holds them on behalf of the actual shareholder. A means of
preserving anonymity of the actual shareholder and for institutional
investors to centralise the administration or individual holdings or their
private clients. |
| NPV: |
No Par Value, being a class of share that does not
have a designated face value. See also Par Value. |
| Offer Price: |
The price in the market which a prospective buyer is
prepared to pay (Offer) to acquire the share. The lower value of the prices
in the bid to offer spread. The price received when the shares are
sold. |
| Option: |
The right, but not the obligation, to buy (for a
call option) or to sell (for a put option) a specific amount of stock,
commodity, currency, index, or debt, at a specified price (the strike
price) during a specified period of time. Stock options, the amount is
usually 100 shares. Also called option contract. |
| Ordinary Share: |
The main class of share capital representing the
owners interest in the company. |
| Oversubscribed: |
Defines a deal in which investors apply for more
shares than are available. Usually a sign that an IPO is good deal and will
open at a substantial premium. |
| Par Value: |
The original face value or the company's share
capital representing the owners interest in the company. |
| PER: |
This expresses the current share price (P) as a
multiple of the earnings per share (E). The P/E ratio is used as a measure
of how much the investor is being asked to pay for the investment. It is a
means of assessing both the value of the company and also its comparative
value and attraction compared to other companies. |
| P/E ratio: |
The P/E ratio shows the number of years' earnings
per share (EPS) contained in the current share price. In other words, it
shows the number of years at current earnings needed to cover the current
share price. The price/earnings ratio (P/E ratio) is commonly used to
assess the level of confidence investors have in a company. It represents
the market's view of a company's growth potential. |
| Placing: |
a means of raising new capital by entering into an
arrangement with major investors who agree to acquire a specific number of
new shares. |
| Portfolio Manager: |
See Fund Manager. |
| Prelims: |
The preliminary announcement, being the initial
report to the stock exchange of the company's financial results for the
year. |
| Premiums: |
the difference between the offering price and the
opening or current price during a new issue of shares through an IPO or
rights issue. |
| Private Company: |
A company whose shares are not traded on the open
market. Opposite of a public company. |
| Private Investor: |
An individual who purchases securities for
him/herself, as opposed to an institutional investor. Also called
individual, small investor or retail investor. |
| Prospectus: |
The document issued at the time of the initial issue
of shares to go public, which explains all aspects of the company's
business, including financial results, growth strategy, and risk
factors. |
| Public Company: |
A company which has shares that investors are able
to acquire in the open market. |
| Request: |
finding a page or a site through the use of a search
engine or a directory. |
| Retail Investor: |
See private investor. |
| Reverse Acquisition: |
A technique used by a private company to go public
without jumping through all the regulatory hoops that going public usually
requires. The private company acquires majority ownership in a publicly
listed company that has no assets or liabilities (called a Shell), changes
the company's name, and installs its management and board of directors.
|
| Reverse Take Over: |
See reverse acquisition. |
| Scrip Issue: |
See bonus issue. |
| SEAQ: |
SEAQ is the London Stock Exchange's service for
mid-cap Official List securities and the most liquid AIM securities. The
service is based on two-way continuous Market Maker quotes.
The Market
Makers quotes on this service are maintained by competing investment banks
whose prices are displayed on more than 100,000 terminals around the world.
These prices enable investors wanting to trade these securities to easily
find a buyer or a seller at a fair and transparent price. For the FTSE 250
securities on SEAQ there is an additional electronic execution facility
allowing you to seek execution at market makers mid-prices, SEAQ Crosses.
These crosses run at 09:30, 11:00, 15:00 and 16:45. |
| SETS: |
SETS is the London Stock Exchange's blue chip market
where all UK FTSE Eurotop 300 equities are traded. The market is based on
an electronic order book. |
| Search Engine: |
Facility to enable internet users to search the
World Wide Web to find specific pages or a site. |
| Securities: |
The Term used for any financial instrument issued by
the company and traded on the stock exchange. |
| Share: |
Representing one unit of ownership in a company. |
| Share Certificate: |
The document that records the shareholders stake in
the company. An indication of ownership to be returned upon the sale of the
holding. |
| Share option: |
See option |
| Shareholder: |
A person, institution or company who owns shares in
a company or mutual fund. For company shareholders along with the ownership
come a right to dividends and the right to vote on certain company matters,
including the board of directors. Also called a stockholder. |
| Shell: |
A company with no real assets or operations. |
| Site: |
A specific group of pages. |
| Spread: |
The difference between the bid and offer prices. |
| Stock: |
An instrument that signifies an ownership position,
or equity, in a corporation, and represents a claim on its proportionate
share in the corporate assets and profits. Also called equities or equity
securities or corporate stock. See also share. |
| Stock Exchange: |
A market on which shares or other securities are
bought and sold. Examples include the London Stock Exchange (LSE). AIM and
Dow Jones. |
| Stockholder: |
Taking the traditional definition, stockholders are
lenders and are accounted among the company's creditors. Interest on stocks
must be paid ahead of any dividend to shareholders. Share or equity capital
is money permanently supplied in exchange for a stake in the ownership of
the business. See also shareholder. |
| Take-over: |
When one company approaches another company, making
an offer to the latter's shareholders, seeking to acquire their shares in
sufficient quantities to take control of. If the company that is being
taken over is listed on the stock exchange, a strict protocol of rules and
regulations exist to protect the interest of the shareholders. A time limit
is set for the acceptance of the offer. If the company making the offer
gets control of 90% or more of the shares, it has the legal right to
acquire the remaining 10% of the shares at the offer price. A takeover bid
may be friendly, recommended by the board of the company being taken over,
or it may be hostile, rejected by the board with the company making the
offer by going directly to the shareholders. |
| Vesting Period: |
The period of time before shares are owned
unconditionally by an employee stock option plan. If his/her employment
terminates before this period ends the company can buy back the shares at
the original price. |
| Web User: |
Someone who accesses sites via the World Wide
Web. |
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