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.
| RADICAL ECONOMIC TRANSFORMATION |
Radical Economic Transformation (RET) is an economic strategy that is espoused by certain factions in the ANC and said to be ANC policy by erstwhile ANC secretary-general,... read more |
| RAF |
Road Accident Fund (RAF) levy. This is a levy collected on every litre of petrol sold for the road accident fund, which is used to pay out victims of accidents on our roads. In July 2018 the... read more |
| RALLY |
A temporary upturn in the price of a share or index or other data stream, which occurs during an overall bear trend. The opposite of a correction. |
| RALLY TOPS |
A series of tops in an established ongoing trend. A bull trend will have a number of rally tops as bulls and bears get in and out of the market. Although the general sentiment in a bull trend... read more |
| RAND |
The currency of South Africa. The currency is also used in Lesotho and Namibia while other countries in the area have pegged their currencies to the rand. The rand took over from the British... read more |
| RAND COST AVERAGING |
The idea of buying more of an investment after a large price move so that the average price is less volatile. Unit trusts make much of this idea because most investors buy small quantities of... read more |
| RAND HEDGE |
Some companies listed on the JSE, receive most of their income in a foreign currency like US dollars, yen or British pounds. These... read more |
| RANDOM WALK |
A theory that says there is no sequential correlation (no "dependence") between prices from one day to the next, and that prices will act unpredictably as they seek a level in response to supply... read more |
| RANGE |
The difference between the high and low price during a given period. |
| RAPAPORT GROUP |
An international network of companies providing services to the diamond industry. Rapaport has a magazine and a Rapnet - a diamond trading network with $7,5bn worth of listings every day. The... read more |
| RAPNET |
An international network of companies providing services to the diamond industry. Rapaport has a magazine and a Rapnet - a diamond trading network with $7,5bn worth of listings every day. The... read more |
| RAROC |
Another measure of risk-adjusted profitability, derived as the ratio between P/L and value at risk. |
| RATE |
A forex term used to describe the price of one currency in terms of another, typically used for dealing purposes. |
| RATE OF CHANGE |
... read more |
| RATING |
The perception of a share among investors. Shares which regularly generate rising earnings over a long period of time enjoy the highest ratings... read more |
| RATINGS AGENCY |
An agency that rates the debt instruments of governments, parastatals and companies. There are three primary ratings agencies... read more |
| RATINGS DOWNGRADE |
The world has three major ratings agencies, Fitch, Moodys and Standard and Poors that constantly monitor and... read more |
| RATIO |
The relationship between two figures from the financial statements, designed to show the profitability or effectiveness of the management within a company. Ratios have no absolute significance,... read more |
| RAW MATERIALS |
These are the materials from which products are manufactured. Many of them (called commodities) are traded on an organised exchange. Manufacturing... read more |
| REACTION |
A short-term decline in price. |
| REAL BODY |
In candlestick charting, the body of the candle is drawn between the opening price and the closing price and is coloured... read more |
| REAL ESTATE |
A fixed asset, being land with or without improvements, owned by both private individuals and companies. Property is unique among assets in that... read more |
| REAL ESTATE INVESTMENT TRUST |
The standard and internationally recognised structure for a property investment company. REIT's (pronounced "rate") came into effect in South Africa from the beginning of 2012.... read more |
| REAL INTEREST RATE |
The interest rate after deducting inflation. Fixed interest deposits earn interest, but most people who place their surplus funds in a fixed deposit do not take into account the impact of inflation... read more |
| REAL RETURN |
The return on an investment after inflation and tax have been deducted. The return before inflation is deducted is known as the nominal return.... read more |
| REAL VALUE |
The real value of a share only exists as an opinion. Everyone has an opinion about whether a share is over- or under-priced. In relation to what? In relation to their perception of its real value.... read more |
| REAL-TIME QUOTES |
Market quotations which are not delayed. |
| REALISED PROFIT/GAIN |
A profit, which is actually in the bank, as opposed to a market appreciation. If you buy shares for R10 and they rise to R12 then you have a market appreciation of R2. Only if you then sell them... read more |
| REALISED/UNREALISED P/L |
... read more |
| RECEIVER OF REVENUE |
The Receiver of Revenue in South Africa, tasked with collecting taxes and customs duties. Since the advent of the ANC government, tax collections in South Africa have improved noticeably, and... read more |
| RECESSION |
A cyclical period of lower economic activity, occurring at regular intervals; as opposed to a depression, which is a period of major economic downturn... read more |
| RECIPROCAL |
A mathematical term which means the inverting of a fraction. Thus the reciprocal of 3/4 is 4/3. This term is used to describe the difference between an earnings yield (EY) and a price:earnings... read more |
| RECKLESS LENDING |
The National Credit Act does not allow financial institutions to lend money to people who cannot afford to repay it. Under the Act, the financial institution must ensure that the borrower has... read more |
| RECM & CALIBRE |
20 - 08 - 2020 RECM and Calibre (RACP) is an investment holding company which has listed its preference shares on the JSE since June 2010. The company is controlled by Theunis de Bruyn,... read more |
| RECORD DATE |
The day determined by the issuer on which the holding, upon which the entitlement is based, is ascertained. |
| RECORD HIGH |
The highest point that an index (or other financial indicator) has reached since it was first recorded. Thus the S&P500 index reached... read more |
| RECTANGLE |
A charting formation in which a share's (or any security) price is bound between two horizontal lines. The upper horizontal line represents resistance at that price level. The bottom horizontal... read more |
| REDEEMABLE PREFERENCE SHARE |
This refers to preference shares or debentures, which are issued with the specific undertaking that they will be bought back or paid out by the company at a certain future date. So redeemable... read more |
| REDEMPTION DATE |
The date on which redeemable preference shares or debentures will be redeemed or paid back by the company. These are really forms of long-term indebtedness, which clearly have to be paid back... read more |
| REDISCOUNT RATE |
This is the "repurchase rate" - an interest rate which is set by the supply and demand for money between the Reserve Bank and the commercial banks.It is also sometimes known as the "base rate"... read more |
| REFINANCING |
The process whereby an organisation reorganises its financial support, usually to obtain longer repayment dates or to replace more expensive debt with less expensive debt. Large organisations... read more |
| REGISTER OF MEMBERS |
A register of a company's shareholders giving details of the shareholder's name and the number of shares held of each class as well as any... read more |
| REGISTERED FINANCIAL SERVICES PROVIDER |
Any person or organization that wishes to engage in the business of asset management or investment advice must first register with the Financial Services Board as a "Financial Services Provider"... read more |
| REGISTERED OFFICE |
In terms of the Companies Act (71 of 2008) every company must have a registered office. That office must be where certain records are maintained... read more |
| REGISTRAR OF COMPANIES |
An old term used under the old Companies Act. Under the new Companies Act (71of 2008) the Registrar of Companies is replaced by the Companies and Intellectual Property Commission (CIPC). The... read more |
| REGISTRATION CERTIFICATE |
When a company is registered with the Companies and Intellectual Property Commission (CIPC) the commission issues a registration certificate and the date of that certificate marks the commencement... read more |
| REGISTRATION NUMBER |
This is a 16-digit number consisting of 8 numbers followed by 2 letters and then a further 6 numbers which is given to identify each company and limited... read more |
| REGRESSION LINE |
A regression line is a mathematical construct which is used in technical analysis - and especially in the construction of a time series moving average. A regression line is a line drawn through... read more |
| REGULAR TRADING HOURS |
The standard, morning/afternoon trading sessions at the U.S. markets. |
| REHABILITATION |
Mines are required by law in South Africa to set aside funds so that at the end of the mine's life the ground where the mine was can be returned as far as reasonably possible to its original... read more |
| REINSURANCE |
The process whereby insurance companies purchase insurance to cover them against some or all of the risks which they have insured. This obviously reduces their risk, but it also increases their... read more |
| REIT |
The standard and internationally recognised structure for a property investment company. REIT's (pronounced "rate") came into effect in South Africa from the beginning of 2012.... read more |
| REIT DISTRIBUTION |
A Dividend paid out by a REIT to investors. REITs (Real Estate Investment Trusts) are investment vehicles listed on the JSE that provide exposure to income generating property. They are required... read more |
| RELATED PARTY TRANSACTION |
A related party is one who has an interest in a transaction made by a company and yet stands to gain from the transaction. In other words, he/she has a conflict of interest. Normally when this... read more |
| RELATED PERSON |
A Companies Act (71 of 2008) term (section 75) which refers to any person who is directly or indirectly related to the director of a company, including his/her spouse, children, parents and siblings... read more |
| RELATIVE RETURN |
The annualised return on an investment in excess of the average three-month US Treasury bill yield during the same period as the investment. This statistic measures the return on an investment... read more |
| RELATIVE RETURN STANDARD DEVIATION |
Measures the amount of variability of the relative return. A large relative return standard deviation indicates that the relative return experienced during the holding period fluctuated dramatically... read more |
| RELATIVE STRENGTH INDEX |
An indicator invented by Welles Wilder, Jr (see his book, New Concepts in Technical Trading Systems) and used to ascertain overbought/oversold and divergent situations. The RSI is a momentum... read more |
| REMAINING LIFE |
An estimate of how long a mine will be able to extract gold (or other minerals) profitably, given the lease area and the expected grade. Clearly an assumption has to be made about the future... read more |
| RENEWABLE ENERGY |
Energy which is not derived from the burning of fossil fuels. There are six types of renewable energy - solar, wind, hydroelectric, tidal, geothermal and biomass.... read more |
| RENKO CHARTING |
A kind of charting, similar to point and figure, that does not take time into account. Invested by the Japanese, renko charting focuses on changes in the price movement that satisfy a specific... read more |
| RENMINBI |
The unit of the Chinese currency - also called a "yuan", which means "round". |
| RENUNCIATION DATE |
The day on which a shareholder must take up his/her rights in a rights issue or lose them. A rights issue is a mechanism whereby a company can raise capital from its existing shareholders by... read more |
| REPLACE ORDER |
To modify an existing, pending or working order. |
| REPLACEMENT COST |
The current cost of replacing an asset which may be on the books of account at its depreciated value. The replacement cost of an asset is usually higher than the value at which the asset is held... read more |
| REPO RATE |
The interest rate charged by a central bank to commercial banks. Commercial banks add a "mismatch factor" (usually about 3,5% in South... read more |
| REPORTABLE IRREGULARITY |
Auditors are required to report anything which they find during the course of their audit which indicates fraud, a breach of fiduciary duties, or anything which might cause the shareholders of... read more |
| REPORTING PERIOD |
The period of time over which the financial affairs of a company are being accounted for in the financial statements. The matching principle... read more |
| REPURCHASE AGREEMENT |
A form of short-term financing between dealers in government bonds whereby a government debt instruments are temporarily sold and then re-purchased the next day - usually at a slightly higher... read more |
| RESERVE |
A figure from the liabilities side of the balance sheet, which is money ploughed back into the business out of profits, arising from a revaluation of assets, or money set aside for the redemption... read more |
| RESERVE ARISING ON ACQUISITION |
A reserve which arises as a result of a holding company paying less for a subsidiary than its book value. The difference is shown in the balance sheet as a liability. |
| RESERVE ASSET |
An asset which will hold its value irrespective of any developments in the economy. Investors are primarily concerned with achieving a balance... read more |
| RESERVE BANK |
The South African Reserve Bank is the central bank of the Republic of South Africa. The Bank was established in 1921 in terms of a special Act of Parliament,... read more |
| RESERVE BANK BULLETIN |
The bulletin is published by the Reserve Bank every quarter and in avaliable in PDF format free of charge. The bulletin covers a very wide range of information and comment on the progress of... read more |
| RESERVE RATE |
The minimum amount of cash which commercial banks are required to keep with the central bank. In South Africa the reserve requirement is 2,5% of the bank's total liabilities... read more |
| RESERVE REQUIREMENT |
The minimum amount of cash which commercial banks are required to keep with the central bank. In South Africa the reserve requirement is 2,5% of the bank's total liabilities... read more |
| RESIDENT |
In terms of the Income Tax Act (1962), an individual who is ordinarily resident in South Africa under common law - or someone who meets the physical presence test. The physical presence test... read more |
| RESIDUAL ASSETS |
Those assets which remain or still belong to a company or individual after the secured creditors have been paid out. In a liquidation or bankruptcy, the liquidators will sell the assets... read more |
| RESIDUAL VALUE |
The standard deviation of the unexplained portion of the monthly return. |
| RESISTANCE |
A price level at which rising prices have stopped rising and either moved sideways or reversed direction; usually seen as a price chart pattern.... read more |
| RESISTANCE LINE |
On a chart, a line drawn indicating the price level at which rising prices have stopped rising and have moved sideways or reversed direction. |
| RESOLUTION |
There are two types of resolutions which can be voted and passed at shareholder meetings. The ordinary resolution which usually deals with normal business like the appointment of directors and... read more |
| RESOURCE NATIONALISM |
The process whereby particularly African governments seek to get a higher return or ownership of companies involved in mining and the exploitation of natural resources. Governments in Africa... read more |
| RESOURCE SHARE |
Shares of companies in the resource sector. Commodity shares are shares of those companies which manufacture, extract or sell... read more |
| RESOURCES |
Basically these are raw materials such as gold, silver, soya beans, sugar, coffee, steel, etc. Many commodities (such as gold)... read more |
| RESTING ORDER |
An order placed with a condition or qualifier but not yet executed. |
| RESTRUCTURING |
The fundamental re-organisation of a company to improve its profitability. Usually a company will undertake a restructuring when it is under stress or to release shareholder value. Typically,... read more |
| RESUCE PLAN |
A plan produced by the business rescue practitioner and presented to a meeting of creditors and holders of a voting interest for a company which has been placed into business... read more |
| RESULTS PRESENTATION |
A meeting at which a company's board will discuss its latest financials with major shareholders and institutions. Following the COVID-19 pandemic in 2020, these meetings are typically held online.... read more |
| RET |
Radical Economic Transformation (RET) is an economic strategy that is espoused by certain factions in the ANC and said to be ANC policy by erstwhile ANC secretary-general,... read more |
| RETAIL INVESTOR |
A natural person (rather than a corporate entity) who invests on the stock market either directly or indirectly. Private investors make up... read more |
| RETAIL SALES |
Those sales which are made to final consumers who buy goods for their own use or consumption. Retail sales are measured monthly and are a key economic... read more |
| RETAINED EARNINGS |
That portion of a company's profits which is ploughed back into the business rather than paid out as dividends - so the equation is: profits (earnings) - dividends = retained earnings. Companies... read more |
| RETENDER |
In specific circumstances, some contract markets permit holders of futures contracts who have received a delivery notice through the clearinghouse to sell a futures contract and return the notice... read more |
| RETENTION RATE |
Percentage of a firm's after-tax profits that can be put to those earnings retained. |
| RETRACEMENT |
A price movement in the opposite direction of the trend. These are corrections (in a bull trend) or a rallies (in a bear trend). A retracement implies that some of the ground lost or gained is... read more |
| RETRACEMENT |
A period in a price chart showing movement opposite to the direction of the prior time period. Also called a "retracement" or sometimes a "counter... read more |
| RETRENCHMENT |
The firing of an employee for operational reasons and not arising from any fault in the employee's performance. If not handled correctly, the company can... read more |
| RETURN |
The return on an investment consists of income plus capital gain expressed as an annualised percentage of the original investment.... read more |
| RETURN ON ASSETS |
The net earnings of a company expressed as a percentage of its assets. |
| RETURN ON CAPITAL EMPLOYED |
A ratio used to measure pre-tax profitability. It may be calculated as pre-tax profit plus interest paid, divided by total shareholders' funds. |
| RETURN ON EQUITY |
A ratio calculated by taking the annual net earnings of a company as a percentage of its equity. Investors are always interested in the percentage return that they are getting on their investments.... read more |
| RETURN ON SHAREHOLDERS' FUNDS |
A ratio calculated by taking the annual net earnings of a company as a percentage of its equity. Investors are always interested in the percentage return that they are getting on their investments.... read more |
| REVALUATION (OF ASSETS) |
When a company purchases an asset the transaction is normally recorded in the books of account at purchase price (known as the book value). In time, however, the asset may come to be worth more... read more |
| REVALUATION RESERVE |
A balance sheet item where funds are set aside to compensate for a negative asset revaluation. For example, if a company has bought a piece of land to develop and is carrying that asset... read more |
| REVENUE |
A figure in the income statement of a company's financial statements which consists of the company's total sales or income figure.... read more |
| REVENUE PER AVAILABLE ROOM |
This is the average revenue collected by a hotel group per room. It is a key statistic fot that sector and is shotened to "revpar". It is calculated by multiplying a hotel's average daily room... read more |
| REVENUE RECOGNITION |
This is the point at which the revenue which accrues from a transaction is recognised. For example, in the construction industry some contracts can last for several years and so bridge several... read more |
| REVERSAL GAP |
When a share's price has been rising for some time and quickly, it will sometimes have a day where the lowest price is far above the previous day's... read more |
| REVERSAL SIGNAL |
A term used in technical analysis to describe a formation found either at the top or bottom of a trend which signals that the trend is about to be reversed. Candlestick formations commonly form... read more |
| REVERSAL SIZE |
In point and figure charting the number of reverse boxes required (set by the user) to indicate a change in the direction of the trend. So for example, in an upward trend, if the box size is... read more |
| REVERSAL STOP |
A stop that, when hit, is a signal to reverse the current trading position, i.e., from long to short. Also known as stop and reverse. |
| REVERSE EXPONENTIAL MOVING AVERAGE |
An exponential moving average computed working backward through the time series, rather than forward, as is the case with a standard EMA. A REMA is used so the target would reflect only future... read more |
| REVERSE HEAD AND SHOULDERS FORMATION |
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 down-trend. The market... read more |
| REVERSE TAKE OVER |
Where a company buys assets, the value of which greatly exceeds its net asset value in exchange for the majority of its shares - so that the seller of the assets ends up with a controlling stake.... read more |
| REWARD-RISK RATIO |
Monthly excess return to risk comparison, calculated by dividing alpha by standard deviation. A ratio better than 0.4 is excellent. |
| REX TRUEFORM GROUP LIMITED |
05 - 09 - 2020 Rex Trueform (RTO) is an extremely thinly-traded company listed on the JSE - which makes it completely impractical for private investors in its current form. The company was... read more |
| RHODIUM |
Rhodium is both a precious metal and one of the six platinum group metals (PGM). Most of the world's rhodium is produced in South Africa with about... read more |
| RICH |
Price higher than expected. |
| RICHARD ARMS |
Richard Arms was an American technical analyst and wrote books on technical analysis. He was most famous for his book "The Arms Index", but wrote... read more |
| RICKSHAWMAN |
A candlestick formation which comprises of a very small or non-existent body and very long upper and lower shadows. The body of the candle is exactly in between the two shadows.... read more |
| RIGHTS ISSUE |
An offer of additional shares to existing shareholders, usually at a discount to the current market price. When a company wishes... read more |
| RING FENCE |
A guarantee given by government, a company or individual that a certain type of tax collection or revenue will not be spent on anything else except a specific type of expenditure. Governments... read more |
| RISING THREE METHODS |
A bullish candlestick signal, formed in the progress of an established uptrend, and used to predict the continuation of the current trend. This formation begins with a long green candle within... read more |
| RISK |
The probability that a share price will go down rather than up. All investments have an element of risk, which is always harder to... read more |
| RISK (IMPLIED) |
In which the formula produces the percentage overbought/oversold for a contract using the price, a moving average and the option's implied volatility. |
| RISK AVERSE |
A term used to describe individuals or funds which seek to avoid excessive investment risk. Most collective investment schemes (CIS) have rules to avoid taking excessive risks with the funds... read more |
| RISK PROFILE |
The degree of risk that an investor is willing to take for a given potential return. The rule in investment is that risk and return should rise together. In other words, the more risky a potential... read more |
| RISK-ADJUSTED RETURN ON CAPITAL |
Another measure of risk-adjusted profitability, derived as the ratio between P/L and value at risk. |
| RISK-OFF |
A period when international investors are for some reason "spooked" and rush to take money out of more risky investments (like emerging markets)... read more |
| RISK-ON |
A time when short-term international investors feel comfortable with investing in more risky assets. This makes them inclined to invest in... read more |
| RISK-WEIGHTED ASSET |
A banking asset which is off-balance sheet and which is valued according to its risk. Risk-weighted assets (RWA) are valued by the directors with their valued... read more |
| ROAD ACCIDENT FUND LEVY |
Road Accident Fund (RAF) levy. This is a levy collected on every litre of petrol sold for the road accident fund, which is used to pay out victims of accidents on our roads. In July 2018 the... read more |
| ROAD SHOW |
A series of presentations undertaken by the directors of a listed company in order to encourage institutional investors to invest in their shares. Companies typically undertake a road show to... read more |
| ROBOTICS |
The science of producing machines that can perform functions previously undertaken by humans. Robotics is advancing at a very rapidly and it is displacing human workers in many fields. It is... read more |
| ROLL |
Substituting a far option for a near option on the same underlying instrument at the same strike price; also to roll forward or roll over. |
| ROLLOVER |
... read more |
| ROTATION |
Moving funds from one sector to another sector of the stock market as the business cycle unfolds. |
| ROTH IRA |
... read more |
| ROUND LOT |
A standard number of shares to be traded on a particular stock exchange. Usually, a round lot is 100 shares or muliples of 100. Thus, for example, 600 shares is a round lot while 632 shares is... read more |
| ROUND LOT |
Also called a "round lot", this is the number of shares which is normally traded. On the JSE the marketable lot is 100 shares - as it is for most markets around the world. A few markets have... read more |
| ROUNDED TOP |
A cycle top on a chart which drifts out and down in a gradual loss of momentum. This is as opposed to a "V" top which is very sharp and sudden. Also called an Umbrella Top, a Frying Pan Top,... read more |
| ROUNDING |
The squaring up or down of an amount of shares to the nearest whole number. Some corporate actions can result in odd lots of shares occuring. For example, if a company undertakes a rights issue... read more |
| ROUNDTURN |
A completed futures transaction involving both a purchase and a liquidating sale, or a sale followed by a covering purchase. |
| RSI |
An indicator invented by Welles Wilder, Jr (see his book, New Concepts in Technical Trading Systems) and used to ascertain overbought/oversold and divergent situations. The RSI is a momentum... read more |
| RULING PRICE |
The price at which the last trade on a security took place, unless there was a higher bid or a lower offer. So, for example, if the most recent trade took place at 100c, but there is an offer... read more |
| RUNNING MARKET |
A market wherein prices are changing rapidly in one direction with very few or no price changes in the opposite direction. |
| RUNNING TOTAL |
Each day's value is added to yesterday's total or subtracted if the value is negative.
|
| RWA |
A banking asset which is off-balance sheet and which is valued according to its risk. Risk-weighted assets (RWA) are valued by the directors with their valued... read more |