List of Glossary Terms
The PDSnet Glossary of Terms contains definitions and explanations for over 2600 financial market terms. These definitions are constantly kept up-to-date with current topical examples from the markets. They are also updated for changes in legislation and current events like COVID19 and the July 2021 civil unrest.
The terms in the Glossary are directly linked to all PDSnet articles, confidential reports, lecture modules and other material. This means that a client reading one of our publications can immediately see which terms are defined in the Glossary and click through to read the definition. Terms within the definitions in the glossary are similarly linked, which gives the Glossary an enormous educational depth share market investors.
| IASB |
In March 2001, the International Accounting Standards Committee (IASC) Foundation was formed as a not-for-profit corporation incorporated in the State of... read more |
| ICB |
A classification system for industries launched by Dow Jones in 2005 and which has gained international acceptance. The system has 11 industries broken... read more |
| IDC |
A development bank established by the Industrial Development Corporation Act (22 of 1940) and owned by the government. The IDC implements government's industrial... read more |
| IDT |
This is a state owned entity which implements and manages social infrastructure programs for the government. The organisation commenced in 1990 with a R2bn grant... read more |
| IDX |
International derivatives exchange allows investors to invest in single stock futures in internationally listed blue chip... read more |
| IDZ |
These are special business zones which enjoy tax and other benefits to encourage rapid industrialisation. They are often located in areas where business is depressed... read more |
| IFRS |
These are a set of standards established by the International Accounting Standards Board which is the standard-setting body formed by a non-profit organisation... read more |
| IFRS9 |
A standard adopted by the International Accounting Standards Board with effect from 1st January 2020 in reaction to the 2008 sub-prime crisis to... read more |
| ILLEGAL MINERS |
The term for an illegal miner in South Africa is Zama Zama, which means "people who try" in Zulu. Illegal miners are also known as "Galamsey". South Africa has... read more |
| ILLEGAL STRIKE |
A labour strike which takes place outside the ambit of the Labour Relations Act. Such wildcat strikes entitle the employer to fire those who are involved.... read more |
| ILLIQUID |
Illiquid shares are those which trade less than R200 000 worth of shares every day on average. Such shares can be traded by private investors,... read more |
| IMAGE |
The way in which the public perceives a company. This can be very important to the company's marketing and to its share price. Companies with... read more |
| IMF |
An organisation with over 185 member countries that aims to maintain international currency stability and maximise economic growth. The IMF regularly... read more |
| IMMUNISATION |
Action taken by an investor or speculator to protect his business or assets against a change in prices. For example, if an investor... read more |
| IMPAIRED ASSETS |
Assets whose book value has been reduced by the board in order to reflect their true market value more accurately. Impairments result... read more |
| IMPAIRMENT |
Assets whose book value has been reduced by the board in order to reflect their true market value more accurately. Impairments result... read more |
| IMPLIED ALPHA |
The excess return expected from a share to justify its current weighting in the portfolio. |
| IMPLIED VOLATILITY |
The volatility computed using the actual market prices of an option contract and one of a number of pricing models. For example, if the market... read more |
| IMPORT |
Goods or a service which was produced in another country and brought into this country. The opposite of an export. South Africa mainly exports... read more |
| IMPORT COVER RATIO |
A ratio which assesses the level of the country's reserves in terms of how many months worth of imports they could cover. A healthy import cover... read more |
| IMPULSE WAVE |
A wave or cycle of waves that carries the current trend further in the same direction. |
| IN PLAY |
A share that is the focus of a public bidding contest, as in a takeover or bear raid. |
| IN-THE-MONEY |
An investment term used to describe a situation in which a particular security can be sold for a profit. This is calculated by taking into consideration... read more |
| IN-THE-MONEY OPTION |
An option that has intrinsic value. A call option is in-the-money if its strike price is below the current price of the underlying... read more |
| INAV |
The value of a company based on its future earnings potential. Sometimes a company's net asset value (NAV) which is based on subtracting its... read more |
| INCLUSION RATE |
In Capital Gains Tax (CGT), the percentage of a capital gain which is included in taxable income. For companies and trusts this is... read more |
| INCOME |
In accounting terms, this refers to all revenues received by a company, both as a result of its sales and other sources such as interest,... read more |
| INCOME DIVIDENDS |
Payments to mutual fund shareholders consisting of dividends, interest and short-term capital gains earned on the fund's portfolio... read more |
| INCOME STATEMENT |
A requirement of the Companies Act and Generally Accepted Accounting Practice (GAAP), the income statement must disclose the turnover of the... read more |
| INCOME TAX ACT |
The Income Tax Act 58 of 1962 has had numerous amendments. Its basic purpose is to consolidate the law relating to the taxation of incomes and donations,... read more |
| INCORPORATION DATE |
The date on which a company was granted its certificate of incorporation by the Companies and Intellectual Property Commission (CIPC). Every company... read more |
| INCORPORATOR |
Under the old Companies Act, the people who started a company were known as the subscribers, because they "subscribed" to the memorandum and articles... read more |
| INDEPENDENT ACCOUNTING PROFESSIONAL |
A type of accountant who is not necessarily a chartered accountant, but who is sufficiently qualified to undertake an independent review on... read more |
| INDEPENDENT DEVELOPMENT TRUST |
This is a state owned entity which implements and manages social infrastructure programs for the government. The organisation commenced in 1990 with a R2bn grant... read more |
| INDEPENDENT POWER PRODUCER |
An independent power producer (IPP) is a private organisation that produces power, usually from renewable energy sources which is then sold to Eskom on... read more |
| INDEPENDENT REGULATORY BOARD FOR AUDITORS |
This organisation established in terms of the Auditing Professions Act (26 of 2005) maintains rules and guidelines for auditors to create and ethical value-driven... read more |
| INDEPENDENT REVIEW |
An independent review is a lower level check of a company's financial statements which can be conducted by an independent accounting professional. This type of check is open... read more |
| INDEPENDENT SYSTEM AND MARKET OPERATOR |
A new electricity distribution entity that will buy electricity both from Escom and independent power producers (IPP) and then sell it to distributors.... read more |
| INDEX |
A weighted or unweighted average of the prices or market cap of a group of shares. There are many types of indices for sectors,... read more |
| INDEX FUND |
An index fund is a unit trust (collective investment scheme) which tracks a... read more |
| INDEX POINTS |
A measurement term for market indices. An index is an aggregate of the listed companies on an exchange, for example,... read more |
| INDICATOR |
A mathematical formula which is applied to a continuous stream of financial data which the objective of identifying buying and selling points. With the advent... read more |
| INDICE |
A weighted or unweighted average of the prices or market cap of a group of shares. There are many types of indices for sectors,... read more |
| INDIRECT |
These are costs which a company has to pay, whether or not they sell anything. So expenses like rent, telephone, salaries and so on. This... read more |
| INDIRECT COST |
These are costs which a company has to pay, whether or not they sell anything. So expenses like rent, telephone, salaries and so on. This... read more |
| INDIRECTS |
A fixed expense which must be paid irrespective of the level of sales. Good examples are rent, salaries and telephones. These expenses are sometimes... read more |
| INDUSTRIAL DEVELOPMENT CORPORATION |
A development bank established by the Industrial Development Corporation Act (22 of 1940) and owned by the government. The IDC implements government's industrial... read more |
| INDUSTRIAL DEVELOPMENT ZONE |
These are special business zones which enjoy tax and other benefits to encourage rapid industrialisation. They are often located in areas where business is depressed... read more |
| INDUSTRIAL POLICY ACTION PLAN |
A plan that was first produced by government following the 2008 sub-prime crisis and which has gone through at least 10 iterations since then. Essentially,... read more |
| INDUSTRIAL SHARE |
A share in the industrial sector of the JSE. Industrials are preferable as an investment to commodity shares (companies... read more |
| INDUSTRY |
A grouping of all shares in the same industry, usually represented by a sector index. If you look at the price page of your newspaper, you... read more |
| INDUSTRY |
A grouping of all shares in the same industry, usually represented by a sector index. If you look at the price page of your newspaper,... read more |
| INDUSTRY CLASSIFICATION |
A grouping of all shares in the same industry, usually represented by a sector index. If you look at the price page of your newspaper,... read more |
| INDUSTRY CLASSIFICATION BENCHMARK |
A classification system for industries launched by Dow Jones in 2005 and which has gained international acceptance. The system has 11 industries broken... read more |
| INEFFICIENT MARKETS |
Behavioural finance. Driven by frame dependence and heuristic bias when market prices stray from fundamental values. In simple terms, new and important... read more |
| INELASTIC |
A microeconomics terms which indicates that the demand or supply for a particular good or service is not reponsive to changes... read more |
| INFLATION |
Inflation is the degree to which a country's currency loses purchasing power over one year - expressed as a percentage. This is usually measured... read more |
| INFLATION TARGET |
The Reserve Bank, through its Monetary Policy Committee (MPC) strives to keep the inflation rate between 3% and 6%. They target the CPI-X... read more |
| INFLATION TARGETING |
The Reserve Bank, through its Monetary Policy Committee (MPC) strives to keep the inflation rate between 3% and 6%. They target the CPI-X... read more |
| INFORMAL SECTOR |
A large sector of the economy that operates (mostly illegally, depending on their size) substantially in cash, thus avoiding their tax obligations. It is... read more |
| INFOWIZ |
An electronic information system operated by the London Stock Exchange (LSE) to provide information on LSE-listed companies to investors and the media. This system... read more |
| INFRASTRUCTURE |
The roads, bridges, electricity distribution network, water supply and sewerage and other civil work usually funded by taxes or rates and provided by the government... read more |
| INITIAL MARGIN |
The amount a futures market participant must deposit into a margin account at the time an order is placed to buy or sell a futures contract. |
| INITIAL PUBLIC OFFERING |
An offer of shares to the public which coincides with the company’s listing on the stock exchange. Most companies decide to list on the stock exchange in order... read more |
| INJECTION |
An amount of cash inserted into an economy from outside. A good example would be the $4,3bn loan which South Africa obtained from the International Monetary... read more |
| INPUT |
A material or product which is used to make another product. Inputs in South Africa are deductible for value added tax (VAT) purposes. If a business buys... read more |
| INSIDE DAY |
Also called an inside day, the harami is a top or bottom candlestick reversal pattern which comprises of a small candle situated within the body... read more |
| INSIDER |
The illegal dealing in shares by people who, because of their privileged position, have information that materially impacts on the value of the shares,... read more |
| INSIDER TRADING |
The illegal dealing in shares by people who, because of their privileged position, have information that materially impacts on the value of the shares,... read more |
| INSIDER TRADING ACT |
The Insider Trading Act (135 of 1998), promulgated in January 1999, was designed to prevent people with inside information concerning any security from... read more |
| INSIDERS |
The illegal dealing in shares by people who, because of their privileged position, have information that materially impacts on the value of the shares,... read more |
| INSOLVENCY |
A legal status which is applied by the court to a person who is unable to pay his/her debts. An insolvent person is restricted in terms of being able to... read more |
| INSTITUTIONAL INVESTOR |
A collective investment scheme (as opposed to an individual), that invests funds arising from deposits, premiums, contributions etc. Examples are insurance... read more |
| INSTITUTIONAL SHARE |
A share which is followed by the big institutions and held by them in their portfolios. A listed share which is patronised by the large... read more |
| INSTRUMENT |
A very generalised term for any sort of security or debt claim. Instruments can include shares, debentures, bonds, derivative... read more |
| INSURANCE ACT (18 0F 2017) |
This is a new act which came into effect on the 1st of July 2018 and which seeks "To provide for a legal framework for the prudential regulation and supervision... read more |
| INSURANCE COMPANY |
A company which is established in terms of the Insurance Companies Act (18 of 2017) to provide insurance policies to protect members of the public, both... read more |
| INTANGIBLE |
Any asset which is not concrete. For example, goodwill or patents, which belong to the company, are not represented by any physical object,... read more |
| INTANGIBLE ASSETS |
Any asset which is not concrete. For example, goodwill or patents, which belong to the company, are not represented by any physical object,... read more |
| INTEGRATED REPORT |
The King 3 report on corporate governance requires that companies produce an integrated report which includes a "sustainability report". Listed... read more |
| INTEGRATED RESOURCE PLAN |
A government plan which maps out the supply of electricity going forward. The IRP was first produced in 2010 and promulgated in March 2011. The plan is supposed... read more |
| INTELLECTUAL PROPERTY |
The product of creative effort. Intellectual property can take the form of an invention, a piece of art work, a piece of writing, a symbol, a name or a design.... read more |
| INTERBANK RATES |
The foreign exchange rates at which large international banks quote other large international banks. Because of the size of such transactions and... read more |
| INTEREST |
Interest is the price of money. When one person or company lends money to another then interest is charged at a percentage of the capital lent over... read more |
| INTEREST BEARING DEBT |
That portion of a company's debt which bears interest. In some cases the founders of a company will inject capital into the company which... read more |
| INTEREST COVER RATIO |
The ratio of a company's interest expense to its earnings before interest and taxation (EBIT). In general, a company's EBIT... read more |
| INTEREST RATE |
The price of money. Money behaves in much the same way as a commodity, in the sense that when it is in short supply, it becomes more expensive and vice... read more |
| INTEREST RATE SWAPS |
An arrangement that requires both sides of the transaction to make payments to each other based on two different interest rates. The most commonly traded... read more |
| INTERIM DIVIDEND |
A dividend paid out by the company when the directors have received the interim financial results. The final dividend is paid... read more |
| INTERIM FINANCIAL RESULTS |
In terms of the Companies Act, all public companies are required to produce interim financial statements covering the first six months of... read more |
| INTERMARKET ANALYSIS |
Observing the price movement of one market for the purpose of evaluating a different market. |
| INTERMEDIATE GOODS |
These are goods or services which are used in the production of the final goods which are sold to the consumer. Intermediate goods are also... read more |
| INTERNAL RATE OF RETURN |
The rate of interest which an individual, or, more commonly, an investment company is willing to accept. To determine your IRR, you need to ask yourself... read more |
| INTERNATIONAL ACCOUNTING STANDARDS BOARD |
In March 2001, the International Accounting Standards Committee (IASC) Foundation was formed as a not-for-profit corporation incorporated in the State of... read more |
| INTERNATIONAL DERIVATIVES EXCHANGE |
International derivatives exchange allows investors to invest in single stock futures in internationally listed blue chip... read more |
| INTERNATIONAL FINANCIAL REPORTING STANDARD 9 |
A standard adopted by the International Accounting Standards Board with effect from 1st January 2020 in reaction to the 2008 sub-prime crisis to... read more |
| INTERNATIONAL FINANCIAL REPORTING STANDARDS |
These are a set of standards established by the International Accounting Standards Board which is the standard-setting body formed by a non-profit organisation... read more |
| INTERNATIONAL MONETARY FUND |
An organisation with over 185 member countries that aims to maintain international currency stability and maximise economic growth. The IMF regularly... read more |
| INTERNATIONAL SECURITIES IDENTIFICATION NUMBER |
Each security trading on the main exchanges of the world has a 12-digit number which enables investors to identify it. The stock exchange... read more |
| INTERNATIONAL TRADE |
The buying and selling of products and services between countries. It is generally recognised that countries benefit directly from trade with other countries.... read more |
| INTRADAY |
Literally, "within the day" as opposed to inter-day. Intraday trades are those that occur during the trading day - i.e. where a security is both... read more |
| INTRINSIC NET ASSET VALUE |
The value of a company based on its future earnings potential. Sometimes a company's net asset value (NAV) which is based on subtracting its... read more |
| INTRINSIC VALUE |
The perceived value of a natural object, e.g. a precious metal, regardless of its actual price at any given time. In economics, value is determined... read more |
| INTRODUCING BROKER |
A firm or individual that solicits and accepts futures orders from customers but does not accept money, securities, or property from the customer. An IB... read more |
| INVENTORY |
Another word for stocks of raw material, work in progress, consumable stores and finished goods. The valuation of the inventory is critical... read more |
| INVERTED HAMMER |
The counterpart of the hammer, this is also a bullish bottom reversal candlestick formation which derives its significance from its... read more |
| INVERTED THREE BUDDHA |
The opposite of a head-and-shoulders formation, this formation normally comes at the bottom of a long downtrend and signals the end of that... read more |
| INVERTED YIELD CURVE |
This concept was developed by Cambell Harvey, a professor of economics at Fuqua School of Business, Duke University. The yield curve inversion occurs when the... read more |
| INVESTABLE MARKET CAPITALISATION |
The free float of a company's shares multiplied by their current market price. Also known as the free float market cap., or the investable... read more |
| INVESTMENT |
|
| INVESTMENT ANALYST |
An investment analyst does research on listed shares in order to provide information to a fund manager to enable him to allocate funds... read more |
| INVESTMENT BANK |
A bank which is focused on helping companies with their corporate actions - especially the raising of additional capital through an... read more |
| INVESTMENT CLUBS |
A small private club formed by a group of investors, usually novices, who pool their time and resources to learn more what they can on their own about various... read more |
| INVESTMENT HOLDING COMPANY |
A company which holds shares in other companies as subsidiary or associate companies. |
| INVESTOR |
A person, either natural or juristic, that purchases and holds any investment in a security. On the JSE, most of the investors are... read more |
| INVESTOR BEHAVIOUR |
The behaviour of investors as a group. Group investor behaviour creates observable patterns in share prices, indexes and other... read more |
| INVESTOR PROTECTION LEVY |
A levy charged by the JSE on all trades on the JSE consisting of 0,0002% of the value of the trade. This pays for insider trading investigations... read more |
| INVISIBLE |
Any asset which is not concrete. For example, goodwill or patents, which belong to the company, are not represented by any physical object,... read more |
| INVISIBLE EXPORTS |
Those exports which are for the sale overseas of services such as insurance and intangible products. "Invisibles" as they are known form part... read more |
| INWARD LISTING |
A foreign company, listed on the JSE and classified by the South African Reserve Bank (SARB) as foreign for index purposes. These companies... read more |
| IPAP |
A plan that was first produced by government following the 2008 sub-prime crisis and which has gone through at least 10 iterations since then. Essentially,... read more |
| IPO |
An offer of shares to the public which coincides with the company’s listing on the stock exchange. Most companies decide to list on the stock exchange in order... read more |
| IRA |
An American retirement vehicle called an Individual Retirement Account (IRA). An employer's retirement plan that, as specified by tax law, allows employees to... read more |
| IRBA |
This organisation established in terms of the Auditing Professions Act (26 of 2005) maintains rules and guidelines for auditors to create and ethical value-driven... read more |
| IRON |
A metal with the chemical symbol "fe". Iron oxidises (rusts) very quickly and so is not often found naturally. However, the world has abundant supplies of iron... read more |
| IRP |
A government plan which maps out the supply of electricity going forward. The IRP was first produced in 2010 and promulgated in March 2011. The plan is supposed... read more |
| IRR |
The rate of interest which an individual, or, more commonly, an investment company is willing to accept. To determine your IRR, you need to ask yourself... read more |
| IRREGULAR FLAT |
A type of Elliott wave correction that has a 3-3-5 wave pattern, where the B wave terminates beyond the start of wave A. A "flat" is in progress, implying... read more |
| ISIN |
Each security trading on the main exchanges of the world has a 12-digit number which enables investors to identify it. The stock exchange... read more |
| ISLAND FORMATION |
A period of sideways movement after a substantial fall, where the share moves up and down within a relatively narrow trading range. Eventually,... read more |
| ISMO |
A new electricity distribution entity that will buy electricity both from Escom and independent power producers (IPP) and then sell it to distributors.... read more |
| ISSUED CAPITAL |
The value of the company’s authorised shares which have been sold to shareholders. Companies issue shares to the public to raise capital... read more |
| ISSUED SHARES |
The value of the company’s authorised shares which have been sold to shareholders. Companies issue shares to the public to raise capital... read more |
| ISSUED SHARES |
The number of shares which a company has sold to the public to raise capital for its establishment or expansion. A company must obtain authorisation... read more |
| ITRIX |
A joint initiative by the JSE and Deutsche Bank to offer South African investors a method of investing in overseas markets using rands on the JSE.... read more |