| Equity market terminology |
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| The second in a two part series looking at some of the essential terms used in stock markets |
ISIN code: International Securities Identification Number, a 12-digit code used to identify securities. Each code is prefixed by the country of issue, i.e. all Irish ISIN codes start with IE. The code is worked out to an international standard for securities codification. The Irish Stock Exchange is the National Numbering Agency for Ireland.
ITEQ: The technology market of the Irish Stock Exchange.
Letter of renunciation: This applies to a rights issue and is the form attached to an allotment letter which is completed should the original holder wish to pass his/her entitlement to someone else, or to renounce his rights absolutely.
Limit: In relation to dealing instructions a restriction set on an order to buy or sell, specifying the minimum selling or maximum buying price.
Listed company: A company that is quoted on the Exchange’s Official List.
Listing particulars: The document a company must publish about itself and any securities it issues before these can be listed on the Official List.
Loan stock: Stock bearing a fixed rate of interest. Unlike a debenture, loan stocks may be unsecured.
Market capitalisation: The market capitalisation of a company is the number of shares in issue multiplied by the current market share price
Member firm: A stockbroking firm which is a member of the Irish Stock Exchange.
NPV or No Par Value:See Par
Net asset value: The value of a company after all debts have been paid, expressed in euros or cents per share.
New issue: A company coming to the market for the first time or issuing additional shares.
Nil paid: A new issue of shares, usually as a result of a rights issue, on which no payment in respect of the issue price has yet been made.
Nominal value: See Par
Nominee name: Name in which a security is registered and held in trust on behalf of the beneficial owner.
Official list: The Irish Stock Exchange’s main market for listing companies.
Offer for sale: A method of bringing a company to the market. The public can apply for shares at a fixed price.
Option: The right (but not the obligation) to buy or sell securities at a fixed price within a specified period.
Ordinary shares: The most common form of share. Holders may receive dividends, which may vary in amount in accordance with the profitability of the company. The holders are the owners of the company.
Pari passu: Equal in every respect. Used to describe a new issue of shares as equal to those shares already in issue.
PAR: The Nominal Value of a security (always taken as £100 in fixed interest stocks). Some securities may have no par value (NPV).
P/E ratio: See Price / Earnings Ratio
Private placement: An issue that is placed with a single or a few investors as opposed to being publicly offered.
Portfolio: A collection of securities owned by a person or financial institution.
Preference shares: These are normally fixed-income shares whose holders have the right to receive dividends before ordinary shareholders but after debenture or loan stockholders have received their interest.
Premium: If the market price of a new security is higher than the issue price, the difference is the premium.
Price/Earnings ratio: The current share price divided by the last published earnings per share, where earnings per share is net profit divided by the number of ordinary shares. The P/E ratio is a measure of the level of confidence investors have in a company (rightly or wrongly) - generally, the higher the figure the higher the confidence.
Privatisation: Conversion of a Government-owned company to public limited company status.
Private company: A company which is not a public company and which is debarred from offering its shares to the general public.
Probate price: A price that is used to assess the value of shares for inheritance tax purposes.
Prospectus: Document which a company is required by law to produce if it is offering its shares to the public.
Proxy: A person empowered by a shareholder to vote on his/her behalf at company meetings.
Public Limited Company: A public company limited by shares and having a share capital, and which may offer shares for purchase by the general public.
Put through: Special dealing procedure whereby the same member firm matches orders for both buyer and seller in a single deal.
Redemption date: The date on which a security (usually a fixed interest stock) is due to be repaid by the issuer at its full face value. The year is included in the title of the security; the actual redemption date being that on which the last interest is due to be paid.
Source: Irish Stock Exchange. |
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| Article appeared in the July 2001 issue.
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