List of Glossary Terms
| 4 AFRICA EXCHANGE |
The 4 Africa Exchange (4AX) began operations as a South African stock exchange in March 2017. To differentiate itself from the other exchanges operating in South Africa, 4AX offers no... read more |
| 4-PRICE DOJI |
A candlestick where all four prices, high, low, close and open are all the same for one trading day. On a well-traded share this would be a very rare occurrence. With a thinly traded share, if... read more |
| 4AX |
The 4 Africa Exchange (4AX) began operations as a South African stock exchange in March 2017. To differentiate itself from the other exchanges operating in South Africa, 4AX offers no... read more |
| A PRIORI |
A Latin phrase meaning "known ahead of time" or more precisely, known without any empirical evidence or experience. The classical example would be a mathematical... read more |
| A2X |
The A2X is a South African stock exchange which competes directly with the Johannesburg Securities Exchange (JSE). It is currently operating only... read more |
| ABANDON |
An option contract which is not enforced because it is out-of-the-money. Options confer a right to either buy (call) or sell (put) a certain quantity... read more |
| ABANDONED BABY |
A rare candlestick pattern which can indicate either a new bullish or a new bearish trend. A bullish abandoned baby pattern occurs where there... read more |
| ABC |
Elliott wave terminology for a three-wave countertrend (or downtrend) price movement in an Elliott cycle. Wave "a" is the first down-wave... read more |
| ABNORMAL ITEM |
An income or expense which may be part of the company's normal business but which is abnormal in amount. So, an unusually high expense or... read more |
| ABOVE-THE-LINE |
Any normal expense or income which has been included in the calculation of a company's gross profit and which is a part of its normal... read more |
| ACCELERATED BOOKBUILD |
An offering of new shares in the short term which is non-promoted to institutional investors in order to raise capital. An accelerated bookbuild... read more |
| ACCEPTANCE |
Where a bank "accepts" some kind of debt instrument usually at a discount. Debt instruments are basically IOU's written by one organisation... read more |
| ACCEPTANCE DATE |
The date on which the right acquired by a shareholder, as a result of a rights issue, must be exercised. Listed companies often raise... read more |
| ACCOMMODATION |
The extension of credit by the Reserve Bank to commercial banks. The central bank acts as a banker to the commercial banks, lending them money... read more |
| ACCOUNTANCY |
A set of conventions for recording and gathering financial transactions in an organisation. The academic discipline which is accountancy has established a set... read more |
| ACCOUNTING CONSERVATISM |
Accountants are notoriously conservative people. Conservatism applies to incomes, expenses, liabilities and assets of unknown amounts.... read more |
| ACCOUNTING CONVENTION |
These are conventions developed by the accounting profession to ensure that the financial statements display a clear and accurate picture of the progress... read more |
| ACCOUNTING 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 |
| ACCOUNTING POLICY |
A policy established by the board of directors for the allocation of transaction entries into the books of account. For public, listed companies,... read more |
| ACCOUNTING RECORDS |
The books of a business. These are the books of first entry and other working papers used by the accountants to draw up a company's financial statements.... read more |
| ACCOUNTS PAYABLE |
Amounts owing to the company's creditors in the balance sheet. These appear under current liabilities. These amounts are owed by the... read more |
| ACCOUNTS RECEIVABLE |
Amounts owing to the company, usually by customers who have bought products on credit. This is another term for "debtors" and appears in the balance... read more |
| ACCRUAL |
A balance sheet item that consists of an expense or income which has not yet been paid or received. So, for example, if a company owes rent... read more |
| ACCUMULATION |
When the volumes traded in a share start to pick up while the share price moves sideways or upwards, this is known as an "accumulation... read more |
| ACID TEST RATIO |
An accounting ratio used to determine whether a company's current assets excluding its stock (i.e. just its debtors' book... read more |
| ACID TURN RATIO |
The ratio os a company's turnover to its assets. The ratio is calculated by dividing a company's total sales by the average... read more |
| ACQUISITION |
This is when one company acquires more than 50% of the shares of another or obtains a controlling interest in its shares. The company acquiring the... read more |
| ACT OF GOD |
A completely unpredictable event or "black swan" (see "The Black Swan" by Nasssim Talbert) event, usually but not always occurring as a result of some natural... read more |
| ACTIVIST SHORT SELLER |
An activist short seller is an investor who takes a short position in a listed company and then publicly attacks them to... read more |
| ACTUALS |
(1) Refers to actual physical commodities, as distinguished from the futures on those commodities. So, for example, there is a "spot... read more |
| ACTUARIES INDEX |
Most stock market indexes, except for the very simplest are calculated by actuaries. This is because the calculation must take into account... read more |
| ACTUARY |
An actuary is an expert in mathematics and statistics who is capable of calculating the probability of key commercial events or of calculating the changing weightings... read more |
| ACZ |
An actuary is an expert in mathematics and statistics who is capable of calculating the probability of key commercial events or of calculating the changing weightings... read more |
| ADAM SMITH |
The first person to study and write about economics. Adam Smith (1723 - 1790) is regarded as the father of the discipline of economics. His book "An Inquiry... read more |
| ADJUSTED TOTAL EQUITY |
This is also known as "adjusted shareholders' equity" and refers to the total amount of money which the shareholders have in a business - the adjustment made is... read more |
| ADMINISTERED PRICE |
Prices of certain products in South Africa are determined, not by the forces of supply and demand, but by various government departments and institutions.... read more |
| ADRS |
Certificates that are issued by a bank of US origin and traded in the U.S. as domestic shares. The certificates represent the foreign securities that the... read more |
| ADVANCE VOLUME DECLINE INDEX |
A breadth indicator which gives a ratio of the volumes of shares with rising prices to shares with falling prices, developed... read more |
| ADVANCE/DECLINE RATIO |
Your software includes a net advance/decline line (Net A/D) for each sector of the market. These are "breadth indicators" which show the extent of the markets move for various sectors and the... read more |
| ADVANCE/DECLINE RATIO |
This is a refinement of the net advance/decline line (Net A/D), calculated by dividing the difference between the total number of shares up and the... read more |
| ADVERSE EXCURSION |
The loss attributable to price movement against the position in any one trade from the time that the trade began. So, for example, if XYZ shares were bought for... read more |
| ADVERSE OPINION |
An audit opinion which indicates that the company's financial statements do not accurately reflect the company's performance during the accounting period or its... read more |
| ADVICE |
Investment advice has become a big industry in South Africa and world-wide. Lay people with surplus cash obviously wish to generate a return which... read more |
| AFFECTED TRANSACTION |
A transaction defined in the Companies Act (71 of 2008) as one which will result in a change in the control of the company. This could be... read more |
| AFRICA BOARD |
A division of the JSE which was abandoned in June 2012. The Africa board was originally supposed to attract companies from the rest of Africa to list... read more |
| AFRICAN AND OVERSEAS |
05- 09- 2020 This is the holding company of Rex Truform (RTO) which is also listed on the JSE. Rex Trueform (RTO) is an extremely thinly-traded company listed on the JSE - which makes it... read more |
| AFRICAN DAWN CAPITAL |
03 - 09 - 2020 This is a small micro-lending company, listed on the Alt-X in 2004. Its share price rose as high as 550c in November 2007, but has since fallen back to 13c. The company is... read more |
| AFRICAN GROWTH AND OPPORTUNITY ACT |
An American Act which allows certain African countries to export to America duty free. Altogether, 37 countries in Africa benefit from this piece of American... read more |
| AFRICAN PHOENIX INVESTMENTS LIMITED |
06 - 03 - 2020 Phoenix (AXL) is a black-controlled investment holding company whose principal asset is its 100% subsidiary, Standard General Insurance (Stangen). African Bank Investments... read more |
| AFRICAN STOCK EXCHANGE |
A stock exchange located somewhere in Africa. The largest stock exchange in Africa... read more |
| AFRIMAT CONSTRUCTION INDEX |
An economic index of activity in the construction sector prepared and produced by the economist Roelof Botha, on behalf of Afrimat, every quarter.... read more |
| AFTER TAX EARNINGS |
The profit of the company after taxation has been deducted. This figure is shown in the income statement and is used for calculating... read more |
| AFTER TAX INCOME |
The profit of the company after taxation has been deducted. This figure is shown in the income statement and is used for calculating... read more |
| AFTER-TAX PROFIT |
The profit of the company after taxation has been deducted. This figure is shown in the income statement and is used for calculating... read more |
| AFTERNOON FIX |
Twice every trading day members of the London Gold Market Fixing meet on a conference call to decide the gold price - at 10.30am (the morning fix)... read more |
| AGE REBATE |
The Income Tax Act (58 of 1962) offers three rebates - primary, secondary and tertiary. In the tax year ending on 28th February 2021, the primary... read more |
| AGENT |
A natural or juristic person who acts on behalf of another such person in a commercial transaction. When a stockbroker acts on behalf of his/her... read more |
| AGGREGATE DEMAND |
This is an economics term which refers to the total expenditure within the economy. It is a method of calculating gross domestic product. The formula is: Gross Domestic Product = Consumer... read more |
| AGM |
This is a meeting of the shareholders of a company, which is required in terms of section 61 of the Companies Act (71 of 2008). The AGM must... read more |
| AGOA |
An American Act which allows certain African countries to export to America duty free. Altogether, 37 countries in Africa benefit from this piece of American... read more |
| AGRICULTURAL PRODUCTS DIVISION |
A division of the JSE that runs spot markets and derivatives markets in agricultural grain products. The main products are soya... read more |
| AGRICULTURE |
An industry engaged in the production of a wide variety of products, both animal and vegetable, by means of cultivating the land. This industry is a major... read more |
| AIM |
A part of the London Stock Exchange which caters for smaller companies - in a similar way to the JSE's Alt-X. Some South African companies... read more |
| ALAN GREENSPAN |
The Chairman of the Federal Reserve Bank of America (Fed) from 1987 to 2006. Alan Greenspan is notable because he ushered in the idea of stimulating... read more |
| ALCO |
A committee of senior executives in a large company that manage the cash flow of the business to ensure that there is sufficient liquidity... read more |
| ALGO |
Trading automatically, usually without human intervention, through a computer system that is directly connected to an organised exchange. This type of trading... read more |
| ALGORITHMIC TRADING (ALGO) |
Trading automatically, usually without human intervention, through a computer system that is directly connected to an organised exchange. This type of trading... read more |
| ALL SHARE INDEX |
All stock exchanges have indexes which provide averages of the prices of their listed shares. These averages are normally... read more |
| ALLOCATION |
The number of shares actually sold to a person who has applied to participate in a new issue. Where the shares of an initial public offer (IPO) are... read more |
| ALLOTMENT LETTER |
Formerly a letter which was issued to inform someone who had applied for shares, either in a rights issue or a public issue, that they had been apportioned... read more |
| ALPHA |
Premium that an investment portfolio earns above a given point of reference; a measure of stock performance independent of the market. Unit... read more |
| ALPHAMIN RESOURCES CORPORATION |
12 - 08 - 2020 Alphamin (APH) is a tin mining and exploration company operating out of Mauritius. Its primary asset is just over 80% of Alphamin Bisie Mining which has a tin mine in the... read more |
| ALT-X |
The Alt-X is part of the JSE. It is a board which is available to those companies which cannot qualify to list on the "main board". The listing requirements... read more |
| ALTERABLE PROVISION |
The Companies Act (71 of 2008) distinguishes between alterable and unalterable provisions. An alterable provision is one which may be changed to suit the... read more |
| ALTERNATE DIRECTOR |
An individual appointed to take the place of existing director in certain specific circumstances, or at times when he is not available. The Companies Act... read more |
| ALTERNATIVE ASSET |
This is an asset which is not traded on any organised exchange in a conventional manner. So, for example, properties are alternative assets, but the shares... read more |
| ALTERNATIVE EXCHANGE (ALT-X) |
The Alt-X is part of the JSE. It is a board which is available to those companies which cannot qualify to list on the "main board". The listing requirements... read more |
| ALTERNATIVE INVESTMENT MARKET |
A part of the London Stock Exchange which caters for smaller companies - in a similar way to the JSE's Alt-X. Some South African companies... read more |
| ALUMINIUM |
A silvery white, soft, non-magnetic and ductile base metal. It is noted for it's low density and ability to resist corrosion. It is used in the transportation... read more |
| AMALGAMATION |
This occurs where two or more companies come under the control of one, whose shareholders then become the shareholders of the companies that were... read more |
| AMERICAN DEPOSITORY RECEIPT |
Certificates that are issued by a bank of US origin and traded in the U.S. as domestic shares. The certificates represent the foreign securities that the... read more |
| AMERICAN OPTION |
An options contract that allows the holder to exercise the option at any time up to and on the expiration date. This is as opposed to a European... read more |
| AMERICAN STOCK EXCHANGE |
Originally an overflow of companies that were too small to list on the New York Stock Exchange, the "Amex" or "the curb" as... read more |
| AMEX |
Originally an overflow of companies that were too small to list on the New York Stock Exchange, the "Amex" or "the curb" as... read more |
| AMORTISATION |
Accounting method in which an asset's cost is spread out over a period of time. For example, a vehicle costing R100 000 might be amortised or "depreciated"... read more |
| ANAUME |
Candlestick formation. An exceptional exhaustion pattern (meaning "gap filling") composed of five candles. The anaume occurs when the gap... read more |
| ANDREWS METHOD |
This is a technical analysis technique (also known as "Andrews' pitchfork" because of its shape) for establishing upper and lower support and resistance... read more |
| ANNUAL EARNINGS CHANGE |
The historical earnings change between the most recently reported fiscal year's earnings and the preceding or a forecast. Paragraph 3.4(b) of the... read more |
| ANNUAL FINANCIAL STATEMENTS |
Sometimes known as an Annual Report or just the "financial statements", this is a document required by the Companies Act (71 of 2008) to be... read more |
| ANNUAL GENERAL MEETING |
This is a meeting of the shareholders of a company, which is required in terms of section 61 of the Companies Act (71 of 2008). The AGM must... read more |
| ANNUAL NET PROFIT MARGIN |
The percentage that the company earned from gross sales (also called "turnover") for the most recently reported fiscal year. In other... read more |
| ANNUAL REPORT |
Sometimes known as an Annual Report or just the "financial statements", this is a document required by the Companies Act (71 of 2008) to be... read more |
| ANNUAL RETURN |
Every company is required in terms of section 33 of the Companies Act (71 of 2008) to submit a return to the Companies and Intellectual Property... read more |
| ANNUAL SALES CHANGE |
The percentage change in sales (turnover) between the most recently reported financial year and the preceding. You should note that unless... read more |
| ANNUALISE |
The process of adjusting performance or return which has been made over a period of less than or more than a year so that it can be compared with the annual... read more |
| ANNUITY INCOME |
An income which comes in regularly, usually as the result of a contractual obligation and a pre-arranged bank debit order. When analysing a share,... read more |
| APEC |
APEC is a group of 21 countries formed in 1989 to encourage trade among the Pacific rim countries. The countries in APEC are: United States; Australia; Brunei... read more |
| APH |
12 - 08 - 2020 Alphamin (APH) is a tin mining and exploration company operating out of Mauritius. Its primary asset is just over 80% of Alphamin Bisie Mining which has a tin mine in the... read more |
| APPLICANT |
An investor who applies for shares in a company's new issue. Sometimes, if the company is seen to be a very good investment,... read more |
| APPLICATION |
This is a form completed by someone who wishes to buy shares as part of a primary market offer. When companies list on the stock exchange,... read more |
| APPRAISAL RIGHTS |
Where a minority shareholder does not agree with a fundamental transaction (i.e. one which will change the control of the company,... read more |
| ARBITRAGE |
Simultaneous trading in assets, currency or bills of exchange in different international markets, to take advantage of the different rates of return... read more |
| ARMS INDEX |
Also known as TRading INdex (TRIN): An advance/decline stock market indicator. A reading of less than 1.0 indicates bullish demand, while greater... read more |
| ARMS RICHARD |
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 |
| ARTICLES OF ASSOCIATION |
Prior to the Companies Act (71 of 2008), this was a document, drawn up by the subscribers of a company at its inception, which governed the... read more |
| ASCENDING FORMATION |
A formation, which is part of an uptrend, where the share price forms a triangle bounded by a horizontal resistance line at the top... read more |
| ASCENDING SCALLOP |
Similar to the cup and handle formation, this chart formation occurs when price dips momentarily, forming a cup, before resuming its upward course. Typically bullish, the scallop form can be... read more |
| ASIA PACIFIC ECONOMIC COOPERATION (APEC) |
APEC is a group of 21 countries formed in 1989 to encourage trade among the Pacific rim countries. The countries in APEC are: United States; Australia; Brunei... read more |
| ASK |
The price at which an investor who is holding a share (or other security) is willing to sell. Also referred to as the "offer price." The JSE's... read more |
| ASSESSED LOSS |
A loss made by a business which has been accepted as valid by the Receiver of Revenue. Such assessed losses can be carried forward and off-set against... read more |
| ASSET |
An item on the balance sheet that means the possessions of a company, an organisation or an individual. Assets can be tangible (e.g. a vehicle),... read more |
| ASSET BACKING |
A strong asset backing indicates that a company has large resources of assets. These may reside in a parent company, or they may belong to... read more |
| ASSET BASE |
A concept which came from the previous Companies Act and its doctrine of Capital Preservation. Money raised by a company as a result of issuing shares... read more |
| ASSET BUBBLE |
An asset bubble is a period where the price of a particular asset reaches unsustainable levels due to investor enthusiasm. Over the centuries there... read more |
| ASSET CLASS |
A category of assets which all have similar characteristics. Thus shares, property, commodities, and fixed interest investments bonds... read more |
| ASSET LIABILITY COMMITTEE (ALCO) |
A committee of senior executives in a large company that manage the cash flow of the business to ensure that there is sufficient liquidity... read more |
| ASSET MANAGEMENT |
The management of listed or unlisted assets (equities, options etc.) by a "fund manager". Asset management is a very well-developed... read more |
| ASSET MANAGER |
The JSE is dominated by institutional investors which account for as much as 90% of all trades. These institutions are pension funds, insurance... read more |
| ASSET MARKET |
An asset market is the spot market for a particular asset. Thus, the gold market or the oil market or the market for pork bellies... read more |
| ASSET OF LAST RESORT |
An asset which will hold its value irrespective of any developments in the economy. Investors are primarily concerned with achieving a balance... read more |
| ASSET STRIPPING |
This occurs where a company is purchased because the market price of its shares is less than the value of its assets. Assets are then... read more |
| ASSET TURN RATIO |
The ratio of a company's sales or turnover to the average value of assets held over the accounting period. The objective... read more |
| ASSIGNMENT |
When a trader sells short an option, he may be assigned in the event that the purchaser exercises the option. A trader with a short call... read more |
| ASSOCIATED COMPANY |
A company in which between 20% and 50% of the share capital is held. Where less than 20% is held then the shares would be considered an "investment" and where more than 50%... read more |
| ASTROPHYSICAL CYCLE |
Any earthly cycle that has been scientifically related to the physics of the planetary system. Some technical analysts say that share market cycles have a correlation... read more |
| ASX |
Formed in 1987 with the amalgamation of the six state exchanges, the ASX offers organised exchanges in equities, derivatives, fixed interest... read more |
| AT BEST |
An instruction given to a stockbroker by his clients to sell or buy "at best" would give the broker freedom to purchase or sell the shares concerned... read more |
| AT CALL |
The term used to describe money placed, usually with a bank, which can be drawn immediately - as opposed to money which is tied up for a period of time.... read more |
| AT MARKET |
An order to be transacted immediately against the best opposite order in the book at the time of making such entry. |
| AT-THE-MONEY |
An option whose strike price is nearest the current price of the underlying deliverable. |
| ATS |
ATS (see SETS). In 1996 the open outcry trading floor was closed on 7 June and replaced by an order driven, centralised, automated trading system known... read more |
| ATTRIBUTABLE EARNINGS |
That part of a company's profit which is "attributable" to the ordinary shareholders. In other words, after the normal operating expenses... read more |
| ATTRIBUTABLE PROFIT |
That part of a company's profit which is "attributable" to the ordinary shareholders. In other words, after the normal operating expenses... read more |
| AUDIT |
All companies listed on the JSE have to produce at least two sets of audited financial statements each financial year - interim... read more |
| AUDIT DISCLAIMER |
This is an audit opinion given when the auditor cannot obtain sufficient documents and information to support their opinion. This can happen because management... read more |
| AUDIT OPINION |
An audit opinion where the auditor refuses to give an opinion because he feels that he can place no reliance on the underlying financial accounts. There are four types of... read more |
| AUDITOR |
A person who is qualified to conduct an audit on a company or other organisation. Auditors are either internal auditors working for the company that... read more |
| AUDITOR-GENERAL |
The auditor-general of South Africa (AGSA) is an appointment in terms of Chapter 9 of the constitution (section 181). The AGSA is tasked with conducting regular... read more |
| AUDITORS' REPORT |
A part of the annual financial statements required by the Companies Act where the auditors state that they have examined the financials and... read more |
| AUSTRALIAN SECURITIES EXCHANGE (ASX) |
Formed in 1987 with the amalgamation of the six state exchanges, the ASX offers organised exchanges in equities, derivatives, fixed interest... read more |
| AUTHORISED CAPITAL |
The number of shares in each class which a company is authorised to issue to the public or in exchange for assets. The authorised shares must... read more |
| AUTHORISED SHARES |
The number of shares in each class which a company is authorised to issue to the public or in exchange for assets. The authorised shares must... read more |
| AUTHORIZED SHARE CAPITAL |
The number of shares in each class which a company is authorised to issue to the public or in exchange for assets. The authorised shares must... read more |
| AUTO CATALYST |
A stainless-steel cylinder containing a honeycomb coated with a solution of rhodium, platinum and palladium. It is installed on a vehicle's exhaust system to convert... read more |
| AUTOMATED TRADING SYSTEM |
ATS (see SETS). In 1996 the open outcry trading floor was closed on 7 June and replaced by an order driven, centralised, automated trading system known... read more |
| AUTOREGRESSIVE INTEGRATED MOVING AVERAGE (ARIMA) |
A linear stochastic model forecasting methodology described by Box and Jenkins in their book "Time Series Analysis, Forecasting and Control". |
| AVERAGE |
The mean of a set of numbers. Averages are used extensively in the share market for the determination of market indexes and economic... read more |
| AVERAGE COST |
A method of valuing shares in a portfolio at the average of what they cost. For example, if 100 shares are bought for 100 cents each and then... read more |
| AVERAGE DIRECTIONAL MOVEMENT INDEX |
Indicator developed by J. Welles Wilder to measure market trend intensity. Average Directional Movement Index Technical Indicator (ADX) helps... read more |
| AVERAGE NUMBER OF SHARES IN ISSUE |
Certain statistics for listed companies on the JSE are given in the form of "per share" data - such as earnings per share and... read more |
| AVERAGE TRUE RANGE |
A moving average of the true range. Developed by J. Welles Wilder and introduced in his book, "New Concepts in Technical Trading Systems" (1978),... read more |
| AVOIDANCE |
The organisation of a person's financial affairs in such a way as to minimise their tax liability within the requirements of the Income Tax Act (58 of 1962). In other words, avoidance... read more |
| AVOISION |
Taking advantages of those parts of the Income Tax Act (58 of 1962) which are not well defined to get out of paying tax. This practice runs the risk that... read more |
| B ORDINARY SHARES |
A second tier of share capital which has different risk and return characteristics from the "A" ordinary shares. For example, following... read more |
| BA |
A document, also known as a "bill of exchange" in terms of which a commercial bank accepts that it will pay the holder within a specified period,... read more |
| BA RATE |
The annualised interest rate at which financial institutions (typically banks) accept or discount bills of exchange. Often in business... read more |
| BACK MONTHS |
Those futures delivery months with expiration or delivery dates furthest into the future; in other words, futures delivery months other than the spot month,... read more |
| BACK OFFICE |
This is the department in a stockbroking firm, which deals with settlement procedures, such as controlling electronic settlements on behalf of clients... read more |
| BACK-DOOR LISTING |
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 |
| BACK-END RATIO |
The ratio of a person's mortgage payments plus any other loan repayments they have to his/her gross monthly income. This ratio is sometimes used by banks... read more |
| BACK-TESTING |
A strategy is tested or optimized on historical data and then the strategy is applied to new data to see if the results are consistent. For example, you may believe... read more |
| BACKING AND FILLING |
A technical analysis term meaning a period of "backing and filling" where a share's price moves up and down within a tight range... read more |
| BACKWARD BENDING CURVE |
An economics concept used to describe a phenomenon which occurs in the labour market. As employees are paid more per hour they will tend to work... read more |
| BACKWARDATION |
... read more |
| BACTERIAL OXIDATION |
The process whereby bacteria oxidise mined ore to assist in the extraction of valuable minerals. The process has been patented by a South African company... read more |
| BAD DEBT |
This is a debt which cannot be recovered - thus forcing the company to write it off against profits. Most companies make provision for bad debts,... read more |
| BAIL OUT |
A bail out occurs where the government of a country or a large company injects funds to save a commercial organisation (usually a bank) from failure.... read more |
| BAIL-OUT |
A bail out occurs where the government of a country or a large company injects funds to save a commercial organisation (usually a bank) from failure.... read more |
| BALANCE OF PAYMENTS |
The combined net position on the capital account and current account of the country. The current account indicates whether South Africa is spending... read more |
| BALANCE OF TRADE |
This forms part of the balance of payments calculation, but refers only to the difference between the value of exports offset against imports.... read more |
| BALANCE SHEET |
A list of all balances taken from a company's ledger after incomes and expenses have been offset to arrive at a profit or loss.... read more |
| BALANCED MUTUAL FUND |
A mutual fund that seeks a return that is a combination of capital appreciation and current income, generally by building a portfolio of bonds,... read more |
| BALOPAY |
The combined net position on the capital account and current account of the country. The current account indicates whether South Africa is spending... read more |
| BANCASSURANCE |
The working together of a bank and an insurance company to exchange their customer lists and thereby increase business. This usually involves a merger,... read more |
| BANDPASS FILTER |
An oscillator that accentuates only the frequencies in an intermediate range and rejects high and low frequencies. Implemented by first applying a low pass... read more |
| BANK |
An organisation registered in terms of the Banks Act (94 of 1990). Commercial banks are deposit-taking institutions that must be registered under the Act to conduct... read more |
| BANK FOR INTERNATIONAL SETTLEMENTS (BIS) |
The BIS is an international bank, owned by central banks, which acts as a bank for bankers. It was formed in 1930 by an agreement between the governments... read more |
| BANK INVESTMENT CONTRACTS |
A negotiated-term deposit issued by a commercial bank. See Guaranteed Investment Contracts (GICs). |
| BANK OF ENGLAND (BOE) |
The central bank of the United Kingdom, located on Threadneedle street. Like all central banks, the BOE is engaged in monetary policy which includes... read more |
| BANK 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 |
| BANKABLE FEASIBILITY STUDY |
A detailed project study that can be submitted to a bank or other lending or investing organistaion with the objective of raising funds to complete the... read more |
| BANKERS' ACCEPTANCE (BA) |
A document, also known as a "bill of exchange" in terms of which a commercial bank accepts that it will pay the holder within a specified period,... read more |
| BANKING COVENANTS |
An agreement reached by a company with its creditors for the repayment of principal and interest on its outstanding debts. Debt covenants give the dates on... read more |
| BANKRUPTCY |
This refers to where an individual has been unable to pay his debts and has been declared insolvent in terms of the Insolvency Act (24 of 1936).... read more |
| BANKSERV ECONOMIC TRANSACTION INDEX |
This index, better known as the "Beti" shows transactions captured at the Bankserv clearing house for cards, automatic teller machines (ATM) and electronic... read more |
| BANKSERV TAKEHOME PAY INDEX |
This is an index of employees' take-home pay from large corporations in South Africa. It is a reflection of the net amount paid into the employee's bank account... read more |
| BAR |
A South African slang term used in the gilts market meaning R1 million - which is the minimum unit of trade in that market. This is similar to the South African slang term "a grand"... read more |
| BAR CHART |
A bar chart shows the range of trade for the previous day, week or month by connecting the highest price reached during the day to the lowest... read more |
| BASE CURRENCY |
In general terms, the base currency is the currency in which an investor or issuer maintains its books of account. In the FX market,... read more |
| BASE EFFECT |
Most economic statistics are measured over the most recent full year, but updated monthly. This means that the latest month's figures will have as... read more |
| BASE LOAD |
The minimum electricity use on an electricity grid over a specific time period, like one week. Ideally, this level of electricity should be provided by an energy... read more |
| BASE METAL |
A metal which has a low value relative to its weight - as opposed to a precious metal or "noble" metal such as gold, silver or platinum.... read more |
| BASE 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 |
| BASE SALARY |
The gross salary that is paid to an employee every month. From this are deducted pay-as-you-earn (PAYE), unemployment insurance fund contributions... read more |
| BASEL ACCORD |
An agreement between the major countries of the world on the standards to be applied to their major banks so as to minimise the risk of a bank collapse... read more |
| BASEL AGREEMENT |
An agreement between the major countries of the world on the standards to be applied to their major banks so as to minimise the risk of a bank collapse... read more |
| BASIC EARNINGS PER SHARE |
A company's earnings (profit) divided by the number of ordinary shares usually expressed as a number of cents per share. The earnings per share (EPS) includes all the companies... read more |
| BASIS POINTS |
The measure of yields on bonds, notes and interest rates; one basis point equals 0.01% of yield. For example if the Governor of the... read more |
| BASIS RISK |
The risk that a hedge contract will not exactly eliminate the risk in the underlying instrument. For example, an investor owns 1000... read more |
| BASKET TRADES |
Large transactions made up of a number of different stocks. |
| BBBEE |
A policy introduced with the Broad-Based Black Economic Empowerment Act (53 of 2003) which came into effect on 21st April 2004. This Act states its objectives as establishing a legislative framework... read more |
| BBBEE SCORECARD |
The Broad Based Black Economic Empowerment Act (53 of 2003) has as its objective the empowerment of black people in South Africa. In order to achieve this... read more |
| BDA |
Broker Deal Accounting system provided for member firms by the JSE information technology division. The system keeps the securities records and books of account for... read more |
| BDI |
The Baltic Dry Index (BDI) is a composite index calculated by the Baltic exchange in London and made up of the Capesize, Panamax and Supramax averages.... read more |
| BEAR |
An investor who believes that the market or a particular share is going to decline from its current position. In the share market,... read more |
| BEAR MARKET |
A market where the average of all shares is falling so that each high is lower than the previous high and each low is lower... read more |
| BEAR RAID |
Where investors who have sold short (made bear sales) attempt to force the price of a share down by making further bear sales... read more |
| BEAR SALE |
A sale of shares before they are purchased. A bear sale (or short sale) is the sale of an undertaking to supply a certain number of shares at a specified date in the future.... read more |
| BEAR SQUEEZE |
A market where the shortage of scrip or a commodity which has been heavily short-sold forces short-sellers to cover at exhorbitant prices. In earlier times a short... read more |
| BEAR TREND |
A long downward trend in a share's price, a sector's index, the all-market index or other indicator. Bear trends and... read more |
| BEARISH COUNTER ATTACK |
The counterpart of the bullish counter-attack candlestick formation, this is a top reversal signal consisting of two candles: the first is a green candle within... read more |
| BEARISH ENGULFING PATTERN |
A top reversal candlestick formation consisting of a small green candle followed by a large red candle which engulfs the previous green candle. This formation is the counter-part... read more |
| BEE |
The Black Economic Empowerment Act (53 of 2002) aimed to empower black people through providing private sector companies with an incentive to increase the black ownership of their... read more |
| BEE BOARD |
A section of the JSE which is devoted to the trade of black empowerment shares. These shares can only be bought and sold by black people. The need for this arises from the problem... read more |
| BELL CURVE |
A statistical concept which seeks to reduce a population to its average and then show the positive and negative departures from that average. So, for example, you could take all... read more |
| BELOW THE LINE |
Those expenses and incomes which are not included in the calculation of headline earnings because they are not part of the company's normal business. |
| BENEFICIAL INTEREST |
An interest of 5% or more in a company. Section 121 (1) of the Companies Act (71 of 2008) states that any investor (natural or juristic) acquiring or disposing of... read more |
| BENEFICIARY |
Someone who is entitled to receive benefits from a trust. The benefits which are disbursed are placed in the hands of trustees and are at their discretion. In general the trustees... read more |
| BENEFICIATION |
The processing of raw materials into commodities with greater value. For example, combining iron ore, carbon and other metals to make steel. South Africa is primarily an exporter... read more |
| BENEFIT |
An addition to an employee's wage or salary such as a clothing allowance, car allowance, pension contribution or medical aid contribution. Generally, the value such benefits are added... read more |
| BESA |
BESA belongs to the JSE which acquired it in 2009 and administers it. It is the largest debt market in Africa and is highly liquid and very well developed. It trades both... read more |
| BETA (COEFFICIENT) |
A measure of the market/non-diversifiable risk associated with any given security in the market. A ratio of an individual stock's historical returns to the average... read more |
| BETI |
This index, better known as the "Beti" shows transactions captured at the Bankserv clearing house for cards, automatic teller machines (ATM) and electronic... read more |
| BETWEEN THE CHAINS |
The stock market in Johannesburg overflowed onto the street outside the old stock exchange building on the corner of Simmonds Street and Commissioner. After a time, the authorities closed... read more |
| BICS |
A negotiated-term deposit issued by a commercial bank. See Guaranteed Investment Contracts (GICs). |
| BID |
An expression of willingness to buy a commodity or share at a given price; the opposite of "offer" or "ask". |
| BID AND ASK |
Highest price and lowest price that an investor will pay or receive for a trade. For example, this is the highest price at which a share could be sold and the lowest price... read more |
| BID PRICE |
The price offered by a buyer for a share. |
| BID SIZE |
The number of futures or options contracts bid at a certain price. |
| BID/OFFER SPREAD |
This is the difference between the price at which buyers will buy shares and sellers will sell shares. For smaller, thinly-traded shares the percentage difference between... read more |
| BIG BANG |
The term coined to denote the deregulation of the London Stock Exchange in 1986. It introduced dual capacity and the dematerialisation of shares. After the big bang,... read more |
| BIG MAC INDEX |
This is an index set up by The Economist magazine in 1986 and based on the cost in US dollars of a Big Mac burger, in various countries around the world. It is an indication of the relative... read more |
| BILL OF EXCHANGE |
A document, also known as a "bill of exchange" in terms of which a commercial bank accepts that it will pay the holder within a specified period,... read more |
| BILL OF EXCHANGE |
A document which reflects that a person (natural or juristic) undertakes to pay a certain amount to another person within a defined period. The bill must be in writing and signed by the... read more |
| BIOX |
The process whereby bacteria oxidise mined ore to assist in the extraction of valuable minerals. The process has been patented by a South African company... read more |
| BLACK BOX |
A proprietary, computerized trading system whose rules are not disclosed or readily accessible. Black boxes usually take the form of a computer program which receives share market data... read more |
| BLACK CHIP |
A listed company whose management consists mainly of Black shareholders. |
| BLACK ECONOMIC EMPOWERMENT |
The Black Economic Empowerment Act (53 of 2002) aimed to empower black people through providing private sector companies with an incentive to increase the black ownership of their... read more |
| BLACK KNIGHT |
... read more |
| BLACK MONDAY |
Monday, 19th October 1987 when the New York Stock Exchange fell by almost 23% in a single trading day. On the JSE, the fall happened... read more |
| BLACK SWAN EVENT |
This is a completely unpredictable event which has a major impact on the world economy. The best current example is the corona pandemic which caused stock... read more |
| BLACKROCK |
The largest asset management company in the world with more than $10 trillion under management. The company is American, located in New York but... read more |
| BLOCK |
A large amount of stock sold as a single unit. This term is most often used to describe a unit of 1000 shares or more. |
| BLOCKED RAND |
Since the 1960's and the Sharpeville riots, the South African government has been motivated to restrict and control the flow of funds out of South Africa. In order to do this, they have regulated... read more |
| BLOW-OFF TOP |
A steep and rapid increase in price followed by a steep and rapid drop in price. Also called a "V-top". |
| BLSA |
An organisation represetning an estimated 90% of big business in South Africa which has the objective of defending the constitution and holding the state to account by strengthening key state... read more |
| BLUE CHIP |
A very safe share that has a long history of sound management and steady dividends. Examples of such shares are Sasol, Bidvest, First National... read more |
| BLUE COLLAR |
A term used to describe people who work mainly with their hands - as opposed to "white collar" who are generally office workers, involved with paper work. The term blue collar originates from... read more |
| BNPL |
Buy now, pay later - or BNPL - is an internet platform which allows shoppers to purchase a product and pay for it in four equal monthly installments interest free. The concept is becoming... read more |
| BOARD |
The collective term for the directors of a company. Directors, appointed by the shareholders, are tasked with the management of the company. They have a responsibility... read more |
| BOARD LOT |
The official minimum number of shares that can be traded on a stock exchange without incurring additional costs. A board lot on the JSE is 100 shares. Some stock exchanges... read more |
| BODY |
In candlestick charting, the body of the candle is drawn between the opening price and the closing price and is coloured... read more |
| BOLLINGER BANDS |
An envelope indicator that draws two lines, 2 standard deviations above and two standard deviations below a moving average of the share's price. The idea is... read more |
| BOLT-ON ACQUISITION |
An acquisition which is small relative to the size of the acquiring company. Smaller acqusitions do not impact on the companies business culture and core activities as much as larger... read more |
| BOND |
A long-term debt security with a stated interest rate and fixed due dates, issued by a corporation or a government, when interest and... read more |
| BOND EXCHANGE OF SOUTH AFRICA (BESA) |
BESA belongs to the JSE which acquired it in 2009 and administers it. It is the largest debt market in Africa and is highly liquid and very well developed. It trades both... read more |
| BONUS ISSUE |
... read more |
| BOOK BUILD |
When a listed company wishes to raise a large amount of capital from the public by selling shares or bonds, they normally do so through a book build. The CEO... read more |
| BOOK LOSS |
A theoretical loss in the value of an asset which has not yet been incurred, but is recorded in the books of account. Financial accounting is generally done on an historical... read more |
| BOOK VALUE |
This is the value at which an asset appears in the books of account of a company. Very often, book values are higher or lower than the real values of the assets, and... read more |
| BOOKBUILD |
A scenario in the share market where a company, or even an individual, sells a large amount of shares, called "the book", off market to institutional investors. In... read more |
| BOOM |
This describes a stage in the business cycle when economic activity is increasing. |
| BOP |
The combined net position on the capital account and current account of the country. The current account indicates whether South Africa is spending... read more |
| BORD AND PILLAR |
A mining strategy which involves excavating "bords" and leaving regular "pillars" for support purposes. Those pillars are then subsequently mined as part of a retreat strategy. This approach... read more |
| BORROWINGS |
This is a term used by share market analysts to refer to a company's long-term indebtedness. It excludes those current liabilities which arise as the result of normal business... read more |
| BOTTOM |
The lowest point in a share's price cycle. Beginners get excited when a share is going up - smart investors get excited when it is going down, especially if it is... read more |
| BOTTOM REVERSAL SIGNAL |
A term used in technical analysis to describe a formation at the bottom of a trend which signals that the trend is likely to change and become a upward trend. Examples... read more |
| BOTTOM-UP APPROACH |
In the share market, this term usually applies to how an accountant approaches the preparation of financial statements. Accountants begin with the books of first entry, like the... read more |
| BOURSE |
A European term for a stock market. For example, the Paris Bourse, or the Frankfurt Bourse. |
| BOX SIZE |
An element of point and figure charting. Point and figure is a one-dimensional chart which has no consistent x-axis showing the passage of time (unlike a line chart). The idea is... read more |
| BOZU |
Literally "bald" or "monk" in Japanese; in candlestick terminology refers to a situation during which a trading cycle opens or closes on a high or low, indicating... read more |
| BRACKET CREEP |
Bracket creep, also called "fiscal drag" occurs because, with inflation, tax payers are pushed into higher tax brackets each year. In normal circumstances the Minister of Finance... read more |
| BRACKETING |
A trading range market or a price region that is non-trending. This means a market, share or index that is moving back and forth between two horizontal... read more |
| BREADTH |
Breadth indicators are a group of indicators which measure how extensive a move in the share market is by comparing the number of shares which went up with the number that... read more |
| BREADTH INDICATOR |
Your software includes a net advance/decline line (Net A/D) for each sector of the market. These are "breadth indicators" which show the extent of the markets move for various sectors and the... read more |
| BREAK |
Where a share, index or other instrument's price moves outside the trading range which has constrained it, breaking a trendline... read more |
| BREAK AWAY GAP |
A visible gap between the highest price of one day and the lowest price of the next. When a share has been trending down for some time it often reaches a point where the buyers... read more |
| BREAK FEE |
A fee usually payable by a company seeking to make an acquisition, to the target company in the event that the acquisition for whatever reason does not go through. This acts... read more |
| BREAK OUT |
A technical term which indicates that a share price has moved clearly up or down after a period of relative indecisiveness or stagnation. A break-out is often a buy signal/sell... read more |
| BREAK-EVEN |
A term used by accountants to indicate that a company has reached the point where it is neither making a loss nor a profit. The expenses at a company are divided into... read more |
| BRENT |
A type of oil which is produced in the North Sea. Brent generally trades at a higher price than other types of crude oil and it is not produced by countries in the Middle East or... read more |
| BRETTON WOODS |
An agreement that established fixed foreign exchange rates for major currencies, provided for central bank intervention in the currency markets, and pegged the price of gold... read more |
| BRETTON WOODS AGREEMENT OF 1944 |
An agreement that established fixed foreign exchange rates for major currencies, provided for central bank intervention in the currency markets, and pegged the price of gold... read more |
| BREXIT |
The British exit from the European Union (EU) or "brexit" as it is known, entered a transitional period between 1st January 2020 and 31st December 2020. Brexit was the result of referendum... read more |
| BRICS |
Brazil, Russia, India, China and South Africa have formed an economic alliance as emerging economies to promote economic growth and co-operation. The BRICS block is seen as opposing the... read more |
| BRIDGING FINANCE |
This is a loan obtained by a company to tide it over a short, temporary cash flow problem. |
| BROAD-BASED BLACK ECONOMIC EMPOWERMENT (BBBEE) |
A policy introduced with the Broad-Based Black Economic Empowerment Act (53 of 2003) which came into effect on 21st April 2004. This Act states its objectives as establishing a legislative framework... read more |
| BROADENING FORMATION |
A technical analysis formation which is the opposite of an asymmetrical triangle. The broadening formation occurs when there is uncertainty and high volatility in the market.... read more |
| BROKER DEALER ACCOUNT SYSTEM |
Broker Deal Accounting system provided for member firms by the JSE information technology division. The system keeps the securities records and books of account for... read more |
| BROKER'S DECK |
Orders physically held by the floor broker in the trading pit. Today, with the advent of computerised trading the stock exchange's computer system shows the best bids... read more |
| BROKER'S NOTE |
A contract document sent to the buyer or seller of shares by his stockbroker to act as confirmation of the transaction. It shows the name of the client, the share or stock in question,... read more |
| BROKER-DEALER |
A firm that handles transactions for its customers and also purchases securities for its own account, selling them to customers. |
| BROKERAGE |
The stockbroker's fee for completing a share transaction. Brokerage is usually calculated on a sliding scale depending on the total value of the transaction. Since deregulation... read more |
| BROWNFIELD OPERATIONS |
A mining term which refers to the development and exploitation of known and proven deposits of minerals. This type of mining operation is clearly less risky than "greenfields operations"... read more |
| BUBBLE |
A period where a particular asset is excessively over-priced. Throughout history there have been various asset bubbles. Perhaps the most famous one was the tulip mania in Holland in the... read more |
| BUDGET |
Every year, at the end of February, the Minister of Finance presents the budget to parliament. In the budget he puts forward an estimate of how much money will be raised through taxes,... read more |
| BUDGET DEFICIT |
This is the difference between government revenue and expenditure. Typically, governments spend more than they receive from taxes and other types... read more |
| BUFFETT WARREN |
Warren Buffett is arguably the most successful investor who has ever lived. He began at the age of 6, selling chewing gum door-to-door in Omaha making a 2c profit on each pack that he... read more |
| BULL |
This term describes an investor who believes that market trends are rising or that a particular share is rising. In the share market the bulls and bears... read more |
| BULL MARKET |
A market where the average of all shares is rising such that each high is higher than the previous high and each low is higher... read more |
| BULL TRAP |
A situation where bullish investors buy into a security too early, before all the bad news has been published and digested by the market. Bear trends typically have... read more |
| BULL TREND |
A long period of consistently rising share prices, or index levels. Usually such trends last from 2 to 4 years. During a bull trend... read more |
| 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 |
| BULLION |
Any precious metal (most commonly gold), which has not been processed into jewellery, coins, or used for any other manufacture. It is normally kept in bulk form in bars known as... read more |
| BULLISH COUNTER ATTACK |
A bottom reversal candlestick pattern comprising of two candlesticks: first a red candle, then a green candle opening well below the close of the preceding red candle and closing at near... read more |
| BULLISH ENGULFING PATTERN |
A bottom candlestick reversal signal, this is a two candlestick pattern consisting of a large green candle enveloping a preceding red candle. This pattern implies that the trend... read more |
| BULLISH FLAG |
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 |
| BUSHVELD IGNEOUS COMPLEX (BIC) |
This is the largest layered igneous intrusion in the world. It was thrust up from the earth's core about 2,1 billion years ago and it is contains a vast wealth of minerals and metals, including... read more |
| BUSINESS CONFIDENCE INDEX |
There are two indices of business confidence in South Africa - the Rand Merchant Bank (RMB)/Bureau for Economic Research (BER) index and the South African Chamber of Commerce and Industry... read more |
| BUSINESS CYCLE |
The overall upward-peak-downward-trough pattern that is followed by business activity. There are a number of theories about the causes of these cycles, but no real explanation for this. The share... read more |
| BUSINESS JUDGEMENT RULE |
This rule is contained in section 76 (4) of the Companies Act (71 of 2008). It protects directors of a company from personal liability if the company incurs a loss... read more |
| BUSINESS LEADERSHIP SOUTH AFRICA (BLSA) |
An organisation represetning an estimated 90% of big business in South Africa which has the objective of defending the constitution and holding the state to account by strengthening key state... read more |
| BUSINESS PLAN |
An detailed written estimate of how a business or an organisation is going to perform in the future, especially financially and in terms of its cash flow. There are many different ways... read more |
| BUSINESS RESCUE |
This is a state which can be invoked by the directors of a company if the company is in extreme stress and cannot meet its immediate debt obligations. The concept replaced... read more |
| BUSINESS RESCUE 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 |
| BUSINESS RESCUE PRACTITIONER |
A person appointed in terms of section 138 of the Companies Act (71 of 2008) to conduct the business rescue of a company. Companies can enter business rescue when they are "distressed"... read more |
| BUST |
This describes a stage in the business cycle when economic activity is low. A bust in the economy results in lower inflation, or even deflation, high unemployment,... read more |
| BUY AND HOLD |
A strategy of buying a tradable such as a share for the long term rather than buying it with the idea of making a quick profit. |
| BUY LINE |
A horizontal line drawn on a line indicator (such as the OB/OS, Momentum or MACD) below which there is historically a much lower probability of being wrong in buying... read more |
| BUY NOW, PAY LATER |
Buy now, pay later - or BNPL - is an internet platform which allows shoppers to purchase a product and pay for it in four equal monthly installments interest free. The concept is becoming... read more |
| BUY ORDER |
An order placed by an investor to purchase shares in a listed company on an organised exchange. Buy orders can be either "market orders" or "limit orders".... read more |
| BUY-BACK |
The process whereby a company buys its own shares on the JSE in exchange for cash. Share buy-backs are allowed, provided the company can establish and the directors... read more |
| BUY-IN |
This is when a stockbroking firm has to buy shares (or other securities) on the market to rectify a failed trade. A failed trade occurs where a trade is not... read more |
| BUYER'S PRICE |
The price at which someone is prepared to buy the shares at a certain time. On the price page of your daily newspaper this is shown at the close of the session reported on, usually... read more |
| BUYING OPPORTUNITY |
A buying opportunity occurs where a share's price is perceived to be well below its true value. Of course, the true value of a share is a matter... read more |
| BUYING PRESSURE |
A high demand for a particular share or class of shares which exceeds the supply and so causes the price to rise. |
| BUYING SIGNAL |
A technical term which refers to a specific event or occurrence which signals to a chartist that it is the correct time to go long (i.e to buy in). The... read more |
| C.A. |
A member of the South African Institute of Chartered Accountants (SAICA). A chartered accountant (CA) is a person who has passed his bachelors degree (usually... read more |
| CA |
A member of the South African Institute of Chartered Accountants (SAICA). A chartered accountant (CA) is a person who has passed his bachelors degree (usually... read more |
| CAC INDEX |
The Cotation Assistee en Continu is an index of the 40 largest shares trading on the Paris stock exchange, now known as the Euronext Paris. It commenced with a base value of 1000 in 1987. It... read more |
| CAC40 |
The trading system used in the 1980's and 1990's by the Paris Bourse in France. This system gave way to the Nouveau Systeme de Cotation (NSC) in 2000, but the CAC40 index... read more |
| CALL ACCOUNT |
An account with a bank where the funds on deposit can be withdrawn immediately without notice. Call accounts typically attract a lower rate of interest... read more |
| CALL OPTION |
The purchased right to buy (call) specified securities at a specified price (strike price) within a specified period (American) or on a specified... read more |
| CALL WARRANT |
This is a securities contract which gives the holder the right to purchase a specified quantity of a company's shares on or before a specific... read more |
| CALMAR RATIO |
The average rate of return for the last 36 months divided by the maximum drawdown for the same period. It is usually calculated on a monthly... read more |
| CANCEL ORDER |
To abort a pending or working order. Occasionally, a trader may attempt to cancel an order that has already been executed but not yet reported as... read more |
| CANDLE VOLUME |
This is a variation of standard candle stick charts whereby the width of the candle reflects the volume traded on that particular day.... read more |
| CANDLE VOLUME CHART |
A candlestick chart where the width of the candles is determined by the volume traded during the day. Obviously this leads to an irregular... read more |
| CANDLESTICK |
An individual display of the high, low, open and close of a specific security over a period of time. A candlestick chart... read more |
| CANDLESTICK BODY |
In candlestick charting, the body of the candle is drawn between the opening price and the closing price and is coloured... read more |
| CANDLESTICK CHARTING |
A charting method which offers an alternative to the bar chart method of displaying daily weekly or monthly data. This method originated in Japan.... read more |
| CAP ISSUE |
Also called "bonus issues", these do not involve transfer of cash between the company and its members. They occur when a company feels it desirable... read more |
| CAPE TOWN STOCK EXCHANGE |
Previously the 4 Africa Exchange (4AX), the Cape Town Stock Exchange began operations as a South African stock exchange in March 2017. To differentiate... read more |
| CAPESIZE SHIP |
A ship which is too large to pass through the Suez or Panama Canals and so has move from one ocean to another by going around Cape Town in South Africa or ... read more |
| CAPEX |
An abbreviation for capital expenditure. It is often used when referring to gold mines. It refers to expenditure of a capital nature - in other words, used... read more |
| CAPITAL |
Money which is used to supply working capital or to purchase capital goods, which are to be used to generate the income of the company. Capital can also include the reserves... read more |
| CAPITAL ACCOUNT |
An element of the Balance of Payments (BOP) which shows the movement of capital into and out of a country. For example, it shows overseas investors... read more |
| CAPITAL ADEQUACY RATIO |
The Reserve Bank's capital requirement for commercial banks set in terms of their risk weighted assets (RWA). The bank's RWA is made up of... read more |
| CAPITAL ALLOWANCE |
A capital allowance enables a company to deduct a portion of any capital cost which they may have incurred during the tax year for... read more |
| CAPITAL BASE |
This is the capital which the private investor has available for investment. This can include the equity in your house, your stock market... read more |
| CAPITAL EMPLOYED |
An out-dated term referring to the liabilities side of the balance sheet. |
| CAPITAL FLOWS |
The movement of capital into and out of a country as shown in the capital account of their balance of payments. In any financial period there... read more |
| CAPITAL GAIN |
A profit made because an investment is sold for more than its purchase price. The term "capital gain" should not be confused with the definition of Capital... read more |
| CAPITAL GAINS DISTRIBUTION |
A distribution to investment company shareholders from net long-term capital gains realised by a regulated investment company on the... read more |
| CAPITAL GAINS TAX |
A tax levied on the sale of an asset at a profit. For example, if you buy a piece of land and then later sell it for R100 000 more than you paid... read more |
| CAPITAL INTENSIVE |
A term which describes those businesses which use huge amounts of capital to make a profit. Maybe they have plant, machinery and land tied up in... read more |
| CAPITAL LOSS |
Losses incurred when capital assets are sold for a price which is lower than the original purchase price. |
| CAPITAL MARKETS |
A broad term which incorporates any market where capital is raised. Mostly this means either the stock market or the bond market. Capital... read more |
| CAPITAL PRESERVATION |
A policy of keeping the cash which a business has in the company rather than paying it out in the form of dividends or using it for capital... read more |
| CAPITAL REDUCTION |
This is an unusual corporate action which involves the return to the shareholders of a company of part of the capital which they contributed... read more |
| CAPITAL STRUCTURE |
This is the way in which a company has raised the capital needed to establish and expand its business activities or, more specifically, the number... read more |
| CAPITALISATION ISSUE |
Also called "bonus issues", these do not involve transfer of cash between the company and its members. They occur when a company feels it desirable... read more |
| CAPITALISING LOANS/INTEREST |
This is the process when loans or interest payable are converted to capital. This alters the gearing or borrowing ratio of the... read more |
| CAPITALISM |
A socio-economic system in which the factors of production are substantially controlled by the private sector rather than the government. Adam Smith... read more |
| CAPITALIST |
A socio-economic system in which the factors of production are substantially controlled by the private sector rather than the government. Adam Smith... read more |
| CAPITALIZE |
This refers to the conversion of an expense from the income statement into an asset on the balance sheet. This is one of the... read more |
| CAPITULATION |
This is a charting term which refers to the lowest point in a bear trend. It is the point where even the most optimistic of the bulls... read more |
| CAPPED INDEX |
An index where the influence of components of the index is limited to a specific percentage of the total. For example, the JSE Top 40 index has a... read more |
| CARBON CREDIT |
The is a policy established in terms of the Carbon Tax Act (15 of 2019) in terms of which taxpaters who are subject to carbon tax may make use of certain allowances... read more |
| CARBON DIOXIDE TAXATION |
A tax introduced by President Cyril Ramaphosa from 1st June 2020 in terms of the Carbon Tax Act (15 of 2019). In terms of this Act, companies will be taxed... read more |
| CARBON FOOTPRINT |
The amount of greenhouse gas (GBG) emissions (particularly carbon) put into the air by a person, company or other organisation. Your carbon footprint... read more |
| CARBON IN LEACH |
A technique whereby cyanide leaching and granulated activated carbon are used to absorb precious metals. The "loaded" carbon is then separated and the gold... read more |
| CARBON NEUTRALITY |
This means achieving a position of zero net emissions of greenhouse gases (GHG) by off-setting emissions with carbon credits or by carbon removal. Some... read more |
| CARBON OFFSET |
The is a policy established in terms of the Carbon Tax Act (15 of 2019) in terms of which taxpaters who are subject to carbon tax may make use of certain allowances... read more |
| CARBON TAX |
A tax introduced by President Cyril Ramaphosa from 1st June 2020 in terms of the Carbon Tax Act (15 of 2019). In terms of this Act, companies will be taxed... read more |
| CARRY TRADE |
The movement of cash from a low interest country or area to a high interest country. Emerging economies typically have considerably higher interest... read more |
| CARRYING BROKER |
A member of a futures exchange, usually a clearing house member, through which another firm, broker or customer chooses to clear all or some... read more |
| CARRYING CHARGE |
The cost of storing a physical commodity, such as grain or metals, over a period of time. The carrying charge includes insurance, storage and interest... read more |
| CARTEL |
A group of companies that together have a sufficiently large share of a particular product or industry so that they can force prices up by not competing... read more |
| CASH |
A balance sheet asset which appears among the current assets as "Cash and Bank Balances" . Cash is part of the company's working capital... read more |
| CASH ASSET |
A company which has cash or near-cash as its only asset. Besides the income derived from investing this cash, these companies... read more |
| CASH COMMODITY |
The actual physical commodity as distinguished from the futures contract based on the physical commodity. Also referred to as Actuals. |
| CASH CONVERSION RATIO |
The ratio of operating cash flow to EBITDA (earnings before interest, taxation, depreciation and amortisation).... read more |
| CASH EQUIVALENT |
Money held in various accounts by a company where it can only be liquidated after a delay. Thus the money in the company's bank account is immediately availabe, but the company... read more |
| CASH FLOW |
This is the amount of cash coming into a company less the amount going out. Cash flow is important because a profitable company can... read more |
| CASH MARKET |
A place where people buy and sell the actual commodities (i.e., grain elevator, bank, etc.) also often known as a "spot market" to distinguish... read more |
| CASH RATIO |
An accounting ratio used to determine whether a company's current assets excluding its stock (i.e. just its debtors' book... read more |
| CASH SETTLEMENT |
A method of settling certain futures or options contracts whereby the market participants settle in cash (rather than delivery of the... read more |
| CASUS FORTUITUS |
In law this refers to an unpredictable event which prevents one party from completing its obligations in terms of a contract. Most major contracts contain a force majeure clause which allows... read more |
| CATAPULT FORMATION |
A formation usually associated with point & figure charting where the chart makes a triple top, breaks above that top and then... read more |
| CAUTIONARY ANNOUNCEMENT |
This is a publicly advertised announcement made by a listed company to urge shareholders to exercise caution when trading in its shares.... read more |
| CBI |
Contingent business interruption (CBI) is a type of business insurance that covers a business against the interruption of its business by a disaster. The business can claim an amount equal to... read more |
| CBOT |
Chicago Board of Trade. The CBOT is a global commodity futures exchange trading treasury bonds, corn, soybean, wheat, mini-sized Dow,... read more |
| CENSURE |
The JSE has very strict rules about what listed companies can and cannot do. If these rules are ignored or broken the JSE sometimes issues... read more |
| CENTRAL BANK |
A government or quasi-governmental organization that manages a country's monetary policy. For example, the U.S. central bank is the Federal Reserve, and... read more |
| CENTRAL ENERGY FUND (CEF) |
This is a state-owned and controlled company established in terms of the Central Energy Fund Act (38 of 1977) which was originally established by the National... read more |
| CENTRAL SECURITIES DEPOSITORY |
The role of a central depository is to maintain records of all purchases and sales of securities on organised exchanges within the country. In South... read more |
| CENTRAL SECURITIES DEPOSITORY PARTICIPANT |
A CSDP is a person authorised to perform custodial, administrative or settlement duties. The central securities depository (CSD) in South Africa is known... read more |
| CEO |
The leader of a company's board of directors. The CEO is in charge of and responsible for everything that happens in the company. However,... read more |
| CERTIFICATE OF DEPOSIT |
A commercial "I.O.U", usually issued by a commercial bank. It is a certificate representing a deposit usually of at least R100 000 which entitles the holder to a rate of annual interest and the... read more |
| CERTIFICATED SECURITY |
A security which is represented by a certificate. This can be the case for equity shares in South Africa, but since dematerialisation... read more |
| CERTIFIED FINANCIAL PLANNER |
To become a certified financial planner (CFP) you must have a post-graduate qualification from one of the recognised Financial Planning Institute's (FPI) approved... read more |
| CFD |
A derivative contract that is not guaranteed by any organised exchange - which means that the counter-party risk is carried by the person buying or selling the contract.... read more |
| CFO |
The Chief Financial Officer (CFO) is the senior executive responsible for managing the financial affairs of a company. The CFO's duties include tracking cash flow,... read more |
| CGT |
A tax levied on the sale of an asset at a profit. For example, if you buy a piece of land and then later sell it for R100 000 more than you paid... read more |
| CHAIKIN OSCILLATOR |
An oscillator created by subtracting a 10-day Exponential Moving Average (EMA) from a three-day EMA of the accumulation /distribution line. This... read more |
| CHAIRMAN OF THE BOARD OF DIRECTORS |
The chairman of the board of directors of a company is usually appointed by the directors. His position is in no way different from the other... read more |
| CHAIRMAN'S REPORT |
Most annual financial statements contain a Chairman's report, although this is not a requirement of the Companies Act. It is worth reading the chairman's... read more |
| CHAMBER OF MINES |
Previously known as the Chamber of Mines, this organisation represents employers in the mining industry in South Africa. Its objective is to support and promote mining in this country. It was... read more |
| CHANNEL |
A technical analysis term which refers to a period during which a data stream oscillates between upper and lower parallel channel lines. You will... read more |
| CHAPTER 9 INSTITUTIONS |
Those institutions which are established in terms of Chapter 9 of the Constitution of South Africa. There are six chapter 9 institutions - the Electoral Commission,... read more |
| CHARISMATIC LEADER |
Many companies listed on the JSE were founded or are run by a charismatic leader. The problem with this is that when that leader leaves the... read more |
| CHARLES DOW |
Charles Dow was one of the founders of Dow Jones & Co. and the originator of the famous Dow Jones indexes. He developed the "Dow Theory" of market movements and is regarded... read more |
| CHART |
In the context of the share market, this is a display or picture of a security that plots price and/or volume (the number of shares... read more |
| CHARTERED ACCOUNTANT |
A member of the South African Institute of Chartered Accountants (SAICA). A chartered accountant (CA) is a person who has passed his bachelors degree (usually... read more |
| CHARTING |
The analysis of group investor behaviour, as reflected in the patterns of share prices and volumes, indices, exchange... read more |
| CHARTING STYLE |
The manner in which the five data points for a share are displayed in a chart. Every trading day, every share has a price for its high,... read more |
| CHARTIST |
A person who studies and makes use of patterns within the prices of shares and other securities. Technical analysis aims to develop a profitable trading strategy... read more |
| CHEAP |
The meaning of the word "cheap" in the share market is not the same as it is in common parlance. When a share is regarded as cheap, then it is perceived... read more |
| CHICAGO MERCANTILE EXCHANGE |
The Chicago Mercantile Exchange (CME). The CME is the largest futures exchange in the United States and also owns and operates the largest futures... read more |
| CHIEF EXECUTIVE OFFICER |
The leader of a company's board of directors. The CEO is in charge of and responsible for everything that happens in the company. However,... read more |
| CHIEF FINANCIAL OFFICER (CFO) |
The Chief Financial Officer (CFO) is the senior executive responsible for managing the financial affairs of a company. The CFO's duties include tracking cash flow,... read more |
| CHINESE WALL |
A communications barrier between members or departments of a financial institution to prevent the transfer of price sensitive information. Chinese... read more |
| CHROME |
A hard, corrosion-resistant, brittle metal processed through a smelter into ferrochrome and used as an additive to make stainless steel. South Africa produces... read more |
| CHROMIUM |
A hard, corrosion-resistant, brittle metal processed through a smelter into ferrochrome and used as an additive to make stainless steel. South Africa produces... read more |
| CIPC |
Established by the Companies Act, this commission is responsible for registering companies in South Africa and maintaining a register of all companies.... read more |
| CIRCUIT BREAKER |
A system of limiting trading highs and price limits on equities and derivatives markets designed to provide a cooling-off... read more |
| CISCA |
This Act replaces the Unit Trust Control Act and the Participation Bonds Act and it came into effect in 2003. It regulates any scheme where members of the... read more |
| CIVIL UNREST |
Any substantial disturbance conducted illegally by a large group of civilians. South Africa is no stranger to civil unrest. In fact it is estimated that there... read more |
| CLAIMS RATIO |
A ratio used by the insurance industry to determine its profitability. The ratio is the total of claims as a percentage of insurance premiums earned.... read more |
| CLASS |
Some listed companies may issue a variety of different shares with different risk profiles to entice investors to support them.... read more |
| CLAW BACK CLAUSE |
This is a clause in an agreement which allows one of the parties to retrieve monies already paid under certain specific circumstances. Typically, employee contracts... read more |
| CLEAR |
The process by which a clearing house maintains records of all trades and settles margin flow on a daily marked-to-market basis for its clearing members. |
| CLEARING HOUSE |
An agency or separate corporation of a futures exchange that is responsible for settling trading accounts, collecting and maintaining margin monies, regulating delivery and reporting... read more |
| CLEARING MEMBER |
A member of an exchange clearing house responsible for the financial commitments of its customers. All trades of a non-clearing member must... read more |
| CLIMATE CHANGE |
A major shift in the earth's climate, almost certainly caused by the build-up of so-called greenhouse gases like carbon dioxide and methane. Current research... read more |
| CLOSE |
This is the price at which the last transaction of a particular share took place during the trading session being reported on. The uncrossing... read more |
| CLOSE CORPORATION |
A type of juristic person designed for use by small businesses to give them the benefits of limited liability but without the red tape and... read more |
| CLOSE OF TRADE |
When the share market stops trading at the end of each trading day. The share price at the close is what is used in all charts... read more |
| CLOSED PERIOD |
The time between the end of a company's financial year and the publication of its audited financial statements. For JSE companies,... read more |
| CLOSED TRADES |
Positions that have been either liquidated or offset. |
| CLOSED-END FUNDS |
A mutual fund that does not sell unlimited shares; one with a specific number of outstanding shares. |
| CLOSING DAY OF OFFER |
Last day on which an offer made by a company to its shareholders may be accepted (e.g. in the case of a rights offer or an offer to... read more |
| CLOSING PRICE |
This is the price at which the last transaction of a particular share took place during the trading session being reported on. The uncrossing... read more |
| CLOSING RANGE |
A range of prices at which futures transactions took place during the close of the market. |
| CLOSING STOCK |
At the end of the accounting period, stock (also called "inventory") must be valued to determine the company's "cost of sales". The... read more |
| CM42 |
The form which must be completed and signed by both the purchaser and seller of shares for a transfer of shares to take place. In practice, since shares... read more |
| CME |
The Chicago Mercantile Exchange (CME). The CME is the largest futures exchange in the United States and also owns and operates the largest futures... read more |
| COAL |
A sedimentary rock which is formed by layers of plants, mostly trees which have become compressed into seams in the rock. Coal is combustible as a fossil fuel... read more |
| CODE |
An abbreviation for securities traded on an organised exchange. Share codes on the JSE are between 3 and 6 letters long - so,... read more |
| CODE FOR RESPONSIBLE INVESTING IN SOUTH AFRICA (CRISA) |
Developed by the Institute of Directors, this code is similar to the "Principles of Responsible Investing" which is backed by the United Nations and was... read more |
| CODE OF GOOD PRACTICE |
This is a lengthy document established in terms of the Broad-Based Black Economic Empowerment Act (53 of 2003) covering such issues as the dismissal of... read more |
| COINCIDENCE |
In Gann theory, a projected reversal point. |
| COINCIDING INDICATOR |
An economic indicator that moves in the same direction as the business cycle. In other words, it turns when the economy as a whole turns, either... read more |
| COLLATERAL |
An asset of some type which is given to a lender as security for the money lent. Any asset of value can act as collateral. With property, the land... read more |
| COLLECTIBLE |
An asset which acquires value independently of its inherent value because it is collected by a sufficiently large group of collectors. Collectibles can... read more |
| COLLECTIVE BARGAINING |
The process whereby employers negotiate with organised labour on issues such as wages, conditions of employment and other benefits. Both parties have a... read more |
| COLLECTIVE INVESTMENT SCHEMES CONTROL ACT |
This Act replaces the Unit Trust Control Act and the Participation Bonds Act and it came into effect in 2003. It regulates any scheme where members of the... read more |
| COLLUSION |
This term is normally used in conjuction with the competition authorities, one of whose functions is to prevent price collusion between companies.... read more |
| COLOCATION |
The JSE offers a colocation facility for those companies that want to use program trading to extract very small profits from arbitrage... read more |
| COMBINED FORECAST |
The weighted average of two or more forecasts. |
| COMEX |
The Comex, which was previously the commodities exchange, is a division of the New York Mercantile Exchange (NYMEX). It trades futures and options in a variety of precious and base metals. This... read more |
| COMMERCIAL |
The commercial sector includes all companies that are involved in the production, processing, or retailing of products and services.... read more |
| COMMERCIALLY ACTIVE |
A term which is used to describe those unemployed people in the economy who are still actively seeking employment and have not yet succeeded in finding... read more |
| COMMERICAL BANK |
An organisation registered in terms of the Banks Act (94 of 1990). Commercial banks are deposit-taking institutions that must be registered under the Act to conduct... read more |
| COMMISSION |
A fee charged by a broker or agent to a customer for executing a transaction. |
| COMMODITY |
Basically these are raw materials such as gold, silver, soya beans, sugar, coffee, steel, etc. Many commodities (such as gold)... read more |
| COMMODITY CURRENCY |
This is a currency the strength of which is primarily determined by a or group of commodities. Typically, this can be found in third world... read more |
| COMMODITY CYCLE |
Commodity prices tend to move in cycles lasting several years. For example, the aluminium price bottomed at $1100 a ton in late 1993... read more |
| COMMODITY POOL OPERATOR |
An individual or organisation which operates or solicits funds for a commodity pool. A CPO is generally required to be registered with the CFTC. |
| COMMODITY SHARE |
Shares of companies in the resource sector. Commodity shares are shares of those companies which manufacture, extract or sell... read more |
| COMMODITY TRADING ADVISOR |
A person who, for compensation or profit, directly or indirectly advises others as to the advisability of buying or selling futures or commodity... read more |
| COMMON STOCK |
A term used in America to describe their equivalent of ordinary shares. |
| COMPANIES ACT |
The Companies Act (71 of 2008) contains the law concerning the formation and management of companies in South Africa. It can be viewed at: |
| COMPANIES AND INTELLECTUAL PROPERTY COMMISSION |
Established by the Companies Act, this commission is responsible for registering companies in South Africa and maintaining a register of all companies.... read more |
| COMPANY |
An organisation which is registered with the Companies and Intellectual Properties Commission and incorporated in terms of the Companies Act (71... read more |
| COMPANY BUY-BACK |
The Companies Act (71 of 2008) allows a company to buy back its own shares in the open market, provided it can pass a solvency and liquidity test. To do this the company board of directors must... read more |
| COMPANY 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 |
| COMPANY REGISTRATION CERTIFICATE |
A certificate which is issued when a company is registered with the Companies and Intellectual Property Commission (CIPC). The certificate is proof that the company is registered... read more |
| COMPANY 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 liability partnership,... read more |
| COMPANY SECRETARY |
In terms of section 86 of the Companies Act (71 of 2008), public or state-owned companies must appoint a company secretary who must be a permanent resident of South Africa but can... read more |
| COMPANY TAX |
In South Africa, company tax is 28% of a company's taxable income. Taxable income is the total of a company's incomes less all its deductible expenses. It is important... read more |
| COMPANY WEBSITE |
These are an immensely valuable source of information for private investors. Almost every listed company maintains a website on which it posts all useful information about... read more |
| COMPARABLE PERIOD |
The previous equivalent financial period with which the current periods figures are comparable. For example, a company's headline earnings per share (HEPS) for the year ended... read more |
| COMPARATIVE FINANCIALS |
The Companies Act (71 of 2008) requires that companies provide comparative figures when reporting their financial results. This usually takes the form of a second column... read more |
| COMPARATIVE RELATIVE STRENGTH INDICATOR |
A technical indicator which compares the price movement of a stock with that of its competitors, industry group or the entire market. This technique enables you to... read more |
| COMPENSATION COSTS |
The regular remuneration of unskilled or semi-skilled, usually blue-collar workers in exchnage for their labour. Wages are often paid weekly or bi-weekly. This is as opposed to... read more |
| COMPETITION |
The capitalist economic system is based on competition. Manufacturers produce a product which they perceive to be in demand and they compete with each other on quality, price and... read more |
| COMPETITION ACT |
This Act sets up the Competition Tribunal, Appeal Court and Commission. Together these three organisations prosecute breaches of the Act and require notification from all companies... read more |
| COMPETITION TRIBUNAL |
The Competition Tribunal is established in terms of section 26 of the Competition Act (89 of 1998) to hear and decide on competition cases prepared by the Competition Commission. These... read more |
| COMPETITIVENESS RANKING |
The global competitiveness index (GCI) is prepared by the World Economic Forum (WEF) annually and it ranks 141 countries on how competitive they are. To do this it uses 12 areas which indicate... read more |
| COMPLIANCE OFFICER |
These days, companies, and especially listed companies have a host of rules and regulations that they must comply with - from the Companies Act... read more |
| COMPOUNDING |
Compounding occurs where the return from an investment is added to the original capital and then itself earns a further return which is further added to the capital and so on. Over... read more |
| COMPULSORY ACQUISITION |
The forced acquisition of minority shares by a majority of more than 90% of the shareholders of a company. In terms of section 124 of the Companies Act (71 of 2008),... read more |
| CONCESSIONARY FINANCE |
Finance which is provided at very low interest rates or even as a donation in order to further an altruistic objective. For example, in 2020, Escom was negotiating with various European... read more |
| CONDITIONAL OFFER |
An offer made to the shareholders of a company conditional to the occurrence of some event. Typically, where a take-over bid is being made, the predator will make an offer... read more |
| CONDITIONS PRECEDENT |
These are the conditions that must be met before a major transaction, such as the sale of a subsidiary or a take-over can take place. Typically, they could include the approval... read more |
| CONFIRMATION |
A charting pattern giving credibility to a formation which has taken place. Typically, it is advised to wait for at least three days which consist of data points confirming... read more |
| CONFIRMATION SIGNAL |
The next candle in a candlestick formation which confirms the previous reversal signal, confirming that a change in the direction of the trend is likely and... read more |
| CONFLICT OF INTEREST |
A situation in which an offical (either commercial or government) can derive a personal benefit from a decision which he is making or is a party to. Conflicts of interest litter the landscape... read more |
| CONGESTION AREA OR PATTERN |
... read more |
| CONGLOMERATE |
... read more |
| CONSENSUS FORECAST |
An average of the forecasts of a group of analysts or economists for a particular economic indicator or the profit of a particular blue chip share. Economists... read more |
| CONSOLIDATION |
1. In technical analysis, where a chart moves up and down within a narrow range, bounded by a support and resistance... read more |
| CONSTRUCTION INDEX |
An economic index of activity in the construction sector prepared and produced by the economist Roelof Botha, on behalf of Afrimat, every quarter.... read more |
| CONSUMER DEMAND |
This is the total of what consumers spend on goods and services for their personal use. It makes up about 60% of gross domestic product (GDP) in South Africa. It generally... read more |
| CONSUMER GOODS |
... read more |
| CONSUMER PRICE INDEX |
The measure of the degree to which the currency of a country is losing purchasing power over time through inflation. In South Africa, the Reserve Bank has chosen the... read more |
| CONSUMER SPENDING |
This is the total of what consumers spend on goods and services for their personal use. It makes up about 60% of gross domestic product (GDP) in South Africa. It generally... read more |
| CONSUMPTION |
Consumption is the buying of goods and services by consumers. Private consumption expenditure by consumers accounts for about 60% of gross domestic product (GDP). It was... read more |
| CONSUMPTION EXPENDITURE |
Consumption is the buying of goods and services by consumers. Private consumption expenditure by consumers accounts for about 60% of gross domestic product (GDP). It was... read more |
| CONSUMPTION FUNCTION |
A linear function representing the realtionship between disposable income and consumer spending. The function assumes that there is a certain amount of spending which is independent... read more |
| CONTANGO |
A futures market in which prices in succeeding delivery months are progressively higher. The opposite of "backwardation". |
| CONTINGENT BUSINESS INTERRUPTION |
Contingent business interruption (CBI) is a type of business insurance that covers a business against the interruption of its business by a disaster. The business can claim an amount equal to... read more |
| CONTINUATION CHART |
A derivatives chart in which the price scale for the data for the end of a given contract and the data for the beginning of the next contract are merged in order to ease the transition... read more |
| CONTINUATION SIGNAL |
A pattern in technical analysis which suggests that a chart is diverging slightly from it's trend however will eventually continue in the general direction as seen... read more |
| CONTINUING OPERATIONS |
Those operations which a company intends to continue with. Companies are always concerned with their focus and they tend to sell or discontinue those operations which they consider... read more |
| CONTRACT FOR DIFFERENCE |
A derivative contract that is not guaranteed by any organised exchange - which means that the counter-party risk is carried by the person buying or selling the contract.... read more |
| CONTRACT MONTH |
The month in which delivery is to be made in accordance with the terms of the futures contract. Also referred to as Delivery Month. |
| CONTRARIAN |
An investor who believes that to beat the market you have to be right when the market is on average wrong. Contrarians delight in buying when everyone else is selling and... read more |
| CONTROL |
Section 2 of the Companies Act (71 of 2008) says, "a person controls a juristic person, or its business, if: (a) in the case of a juristic person that is a company— |
| CONTROL PREMIUM |
... read more |
| CONTROLLING SHAREHOLDER |
A shareholder who owns more than 50% of a company's voting share capital and can therefore control the company's activities. |
| CONVARIANCE |
Multiplies the deviation of each variable from its mean, adds those products and then divides by the number of observations. The objective is to provide a measure of the volatility... read more |
| CONVERGENCE |
When futures prices and spot prices come together at the futures expiration. Futures contracts expire at the end of each quarter - in other words at the end of March, June,... read more |
| CONVERSION ARBITRAGE |
Traders buy and sell two different securities (or synthetic securities), forcing equivalent prices for equivalent securities. |
| CONVERTIBLE PREFERENCE SHARE |
This is a preference share which can be converted into an ordinary share on a specified future date. This gives a higher degree of security than buying ordinary shares directly... read more |
| CONVERTIBLE SECURITIES |
These are shares, debentures or other securities which are convertible either voluntarily or compulsorily into ordinary shares at some future specified date.... read more |
| COPPER |
One of the elements with the symbol "cu". Copper is a maleable base metal which conducts electricity and heat very efficiently. It is used for most electrical... read more |
| COPPOCK CURVE |
A long-term price momentum indicator. For example, a 10-month weighted moving average of the sum of the 14-month rate of change and the 11-month rate of change for... read more |
| CORE BUSINESS |
The primary business of any company. You will often hear of companies selling off their non-core businesses in order to focus on their most profitable core businesses.... read more |
| CORNER |
This is when a share, which has been short -sold, falls into the hands of a few investors who are unwilling to sell and who thus cause a bear squeeze. Also where one... read more |
| CORPORATE |
Of or pertaining to a company. Thus, for example, a company's image is known as its "coporate image". Companies are juristic persons resonsible for their own debts and management... read more |
| CORPORATE ACTION |
Any action taken by a company that has a major effect on its shareholders. Corporate actions are divided into those which require the shareholder to do something (like take up a... read more |
| CORPORATE GOVERNANCE |
A set of rules and procedures which control the way in which a company is managed in the interests of its primary stakeholders including its shareholders, employees, the... read more |
| CORPORATE 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 a bad corporate image usually... read more |
| CORPORATION |
An organisation which is registered with the Companies and Intellectual Properties Commission and incorporated in terms of the Companies Act (71... read more |
| CORRECTION |
This term is used quite loosely to mean any short-term change in the direction in which a share or market is moving. More strictly, it refers to... read more |
| CORRECTION WAVE |
A wave or cycle of waves moving against the current impulse trend's direction. |
| CORRELATION COEFFICIENT |
This is the degree to which two continuous data streams (such as two share price graphs or currencies) are the same - i.e. the degree to which they "correlate". When two... read more |
| COST ACCOUNTANCY |
The recording and analysis of a company's costs in such a way as to improve its profitability. Cost accounting is distinguished from financial accounting. Financial accounting simply... read more |
| COST BASIS |
The cost of a given share or group of stock shares. This is used as a bench-mark to establish whether the investment is profitable or not and by what percentage. |
| COST OF CONTROL |
... read more |
| COST OF EXTRACTION |
This is a mining term which refers to the cost extracting a metal or mineral from its ore body so that it can be sold. In South Africa, this concept is mainly applied to precious metals... read more |
| COST OF SALES |
An accounting measure which endeavours to measure the cost of the goods sold during the accounting period. The method is to value the inventory (stock) at the start... read more |
| COSTS |
This something which a company has to pay for. Companies have two types of expenses - those which go up and down with sales and those which have to be paid even if there are no sales.... read more |
| COTATION ASSISTEE EN CONTINU (CAC) |
The trading system used in the 1980's and 1990's by the Paris Bourse in France. This system gave way to the Nouveau Systeme de Cotation (NSC) in 2000, but the CAC40 index... read more |
| COUNTER |
A part-ownership of a company. The ownership of companies is divided into individual shares which, if the company is listed on the JSE, can... read more |
| COUNTER PARTY |
One of the participants in a financial transaction. This term is typically used when speaking of foreign exchange (FX) transactions. |
| COUNTER PARTY RISK |
The risk that the other party to a securities transaction will not fulfil their obligations. In other words, if you are buying and the seller will not supply the scrip or if you... read more |
| COUNTER TREND |
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 |
| COUNTERMOVE |
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 |
| COVENANT |
An agreement reached by a company with its creditors for the repayment of principal and interest on its outstanding debts. Debt covenants give the dates on... read more |
| COVER |
Purchasing back a contract sold earlier. For example, if a share is sold short, the short seller is exposed until he buys back sufficient shares... read more |
| COVERED OPTION |
A short call option or put option position which is covered by the sale or purchase of the underlying futures contract or physical commodity. |
| COVERED WRITE |
Writing a call option against a long position in the underlying security. By receiving a premium, the writer intends to realize additional... read more |
| COVID-19 |
In January of 2020, the World Health Organisation confirmed a corona virus (SARS-CoV-2) as the causative agent of coronavirus disease 2019. (COVID-19). By June... read more |
| CPI |
The measure of the degree to which the currency of a country is losing purchasing power over time through inflation. In South Africa, the Reserve Bank has chosen the... read more |
| CPI-X |
The consumer price index excluding the effect of interest rate changes. This is the number that the Reserve Bank uses in their inflation targeting.... read more |
| CPO |
An individual or organisation which operates or solicits funds for a commodity pool. A CPO is generally required to be registered with the CFTC. |
| CRASH |
A sudden fall in stock market prices, sometimes in a single trading day, and which is usually followed by a bear trend. This happens generally because market prices have risen to unrealistically... read more |
| CRASH |
A significant and sudden fall in the total market. In general, anything less than a 20% fall in the market as a whole is regarded as a correction... read more |
| CREDIT ACTIVE |
This term is used to describe a consumer who makes use of credit in various forms. In South Africa, about 25m people are credit active - and over 40% of those... read more |
| CREDIT LOSS RATIO |
This is a banking ratio which is the total impairment losses as a percentage of total loans and advances. This shows how much the bank... read more |
| CREDITORS |
Amounts owing to the company's creditors in the balance sheet. These appear under current liabilities. These amounts are owed by the... read more |
| CRISA |
Developed by the Institute of Directors, this code is similar to the "Principles of Responsible Investing" which is backed by the United Nations and was... read more |
| CRITICAL MASS |
In the share market this refers to a company's size and its ability to achieve economies of scale in its production. Smaller companies are often at a disadvantage because they do not have the... read more |
| CRN |
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 liability partnership,... read more |
| CROSS HOLDING |
A cross holding occurs where two closely connected companies own shares in each other. This often happens when a subsidiary company owns shares in its parent company.... read more |
| CROSS MARKETING |
Where one company or division within a group markets its products to the clients of another company or division in the group. This creates some synergies and reduces the cost of marketing.... read more |
| CROSS RATE |
The exchange rate between any two currencies that are considered non-standard in the country where the currency pair is quoted. For example, in the... read more |
| CROSSED MARKET |
Where a quoted bid price is higher than the offer price for a security. |
| CRYPTOCURRENCY |
A digital or virtual currency used as a medium of exchange using cryptography for security, transactional accuracy, creation and verification. These currencies... read more |
| CSD |
The role of a central depository is to maintain records of all purchases and sales of securities on organised exchanges within the country. In South... read more |
| CSDP |
A CSDP is a person authorised to perform custodial, administrative or settlement duties. The central securities depository (CSD) in South Africa is known... read more |
| CTA |
A person who, for compensation or profit, directly or indirectly advises others as to the advisability of buying or selling futures or commodity... read more |
| CTSE |
Previously the 4 Africa Exchange (4AX), the Cape Town Stock Exchange began operations as a South African stock exchange in March 2017. To differentiate... read more |
| CUM DIV |
Shares are said to be "cum div" in the period between declaration of the dividend and the last day to trade. A sale of shares while they are "cum... read more |
| CUMULATIVE PREFERENCE SHARE |
A preference share accumulates its dividend in the event of the preferential dividend being passed for one or more years. Preferential dividends... read more |
| CUP AND HANDLE |
An accumulation pattern observed on bar charts. The pattern lasts from seven to 65 weeks; the cup is in the shape of a "U" and the handle... read more |
| CURATORSHIP |
The safeguarding and management of the financial affairs and estate of another person because they are incapacitated by their absence or because they are incapable... read more |
| CURB |
Originally an overflow of companies that were too small to list on the New York Stock Exchange, the "Amex" or "the curb" as... read more |
| CURRENCY |
A medium of exchange used as a store of value or in the commercial exchange of value between persons or organisations. Historically, currencies were physical commodities... read more |
| CURRENCY BACKING |
A hard asset, usually gold, that is used to back a national currency. Originally when paper money was first used, these were certificates... read more |
| CURRENCY CROSS |
An exchange rate between the traded currencies of two countries. Thus the US dollar/euro, the pound/rand and the yen/dollar are all currrency crosses... read more |
| CURRENCY FUTURE |
A contract to exchange one currency for another at a specific future date (the expiration date) and at a specified rate (the exchange rate). More than most derivatives, foreign exchange futures... read more |
| CURRENT ACCOUNT |
This is an element of the balance of payments (BOP) toegther with the capital account. It shows a country's trade in goods and services... read more |
| CURRENT ASSET |
An item on a balance sheet which includes any assets which can easily be turned into cash (have high liquidity) and which will only be held... read more |
| CURRENT LIABILITY |
Any liability that must be paid within a year from the date of the balance sheet. These are mainly amounts owed by the company, which must... read more |
| CURRENT RATIO |
The ratio of current assets to current liabilities. The objective of this ratio is to determine whether the company can meet its short-term... read more |
| CUSIP |
The number assigned by the Committee of Uniform Security Identification Procedure that appears on all securities documents. Each security is given a number... read more |
| CUSTODY AND ADMINISTRATION OF SECURITIES ACT (85 OF 1992) |
An Act which dealt with the transition from an open-outcry share market with physical share certificates to an electronic market with dematerialised... read more |
| CUTOFF FREQUENCY |
A point where higher frequency cycles will not pass through a filter (e.g., a 10-day simple moving average will eliminate cycles of 20 days or less). |
| CYCLE |
Shares, industries and markets move in cycles. There are three types of cycles: primary, secondary and daily fluctuations. Primary trends last from... read more |
| CYCLICAL |
A cyclical share is one which is heavily impacted by the business cycle. When the economy is going through a slow growth period (a recession)... read more |
| CYCLICAL SHARES |
A cyclical share is one which is heavily impacted by the business cycle. When the economy is going through a slow growth period (a recession)... read more |
| DAILY DEALS |
One of the pieces of information supplied by the JSE for each listed company after each trading day. There are no indicators which utilise this piece of information, but it can be useful to distinguish... read more |
| DAILY FLUCTUATIONS |
Charles Dow in his "Dow Theory" proposed that share prices, and especially indexes, move in three distinct patterns - bull trends and bear trends... read more |
| DAILY RANGE |
The difference between the high and low price during one trading day. This range shows the degree of uncertainty prevailing among the investors interested... read more |
| DARK CLOUD COVER |
A top reversal candlestick formation which consists of a long green candle followed by a red candle. Confirmation of this signal would be the appearance of another... read more |
| DARK POOL LIQUIDITY |
Trade which takes place between institutional investors on private confidential exchanges which are not open to the public. Institutions do this to prevent other institutions from... read more |
| DATA MINING |
The process of using super-computers to sift through the massive quantities of data produced every day by the securities markets to establish potentially profitable correlations.... read more |
| DATA PREPROCESSING |
Altering data to some extent to be more accurately analysed; smoothing, reducing unwanted data, removing trend. Processing data is mathematically transforming the data from one form into... read more |
| DATA SMOOTHING |
Removing the variability and market noise in a chart to reveal the correct underlying trend. This can be done by using a moving average, among other mathematical algorithms. |
| DATA STREAM |
A data stream is any continuous flow of end-of-day financial data which can be displayed as a chart. The most common forms of this are the end-of-day high, low, open,... read more |
| DATE ISSUE CLOSES |
The date on which a rights issue closes. A rights issue is a corporate action in terms of which a company issues additional shares to its existing shareholders.... read more |
| DATE OF DECLARATION |
The date on which a dividend is declared by a company's board of directors once they have seen the results from the interim or final accounting period.... read more |
| DATE OF FOUNDING |
The date on which a company was founded. You should bear in mind that this date is often long before the date that the company was listed on the JSE. Your stock exchange handbook gives the year... read more |
| DATE OF INCORPORATION |
The date on which a company was granted its certificate of incorporation by the Companies and Intellectual Property Commission (CIPC). Every company must register a Memorandum of... read more |
| DATE OF LISTING |
The date on which a company was listed on the JSE. Most listing are accompanied by an initial public offer (IPO) whereby the company raises capital from the public to fund its business. One of... read more |
| DATE OF PAYMENT |
One of the dates associated with the payment of a dividend by a listed company. The dates are the date of declaration when the board announces the dividend,... read more |
| DATE OF RECORD |
The date on which a dividend payout or rights issue is based. These "corporate actions" apply to shares which are in the company register on the date of record. The... read more |
| DAVID LI |
A Chinese actuary and quatitative analyst who is best known for his application of gaussian copulas for securitised mortgage bonds leading to the "sub-prime" crisis of 2007/8. Li's formulae justified... read more |
| DAX |
This is a simple index of the thirty largest shares trading on the German stock exchange, based in Frankfurt. The DAX is a Paasche index which began on 30-12-1987 at a base... read more |
| DAY ORDER |
An order that if not executed expires automatically at the end of the last trading session on the day it was entered. |
| DAY'S MOVE |
The extent to which a share moves during the course of the trading day on the Stock Exchange. You will find the day's move quoted as a separate column in the newspapers,... read more |
| DBSA |
This is a state-owned enterprise which focuses on supporting projects which will enhance the standard of living and infrastructure of South Africa and the rest of Africa. It is... read more |
| DCM |
A division of the JSE which was folded into the Alt-X. This division was originally for smaller companies requiring less capital and no history of profits.... read more |
| DE-LISTING |
The removal of a security from an organised exchange - after which it can no longer be traded on that exchange. This typically happens in the share market when a company... read more |
| DEAD CAT BOUNCE |
A rebound in a market that sees prices recover from a very sharp fall and come back up somewhat. Usually this occurs during a bear market where the extent of the initial... read more |
| DEAL |
In the context of the share market this means a transaction whereby shares are exchanged for cash, either in the primary market or the secondary... read more |
| DEALER |
An individual or firm acting as a principal or counterparty to a transaction. Principals take one side of a position, hoping to earn a spread (profit) by closing out the position in a... read more |
| DEALING COSTS |
The costs of trading in shares are brokerage - which varies according to the stockbroker you are dealing through, STRATE settlement... read more |
| DEBASEMENT |
The reduction of a commodity currency by adding a base metal - such as lead. During the time of the Roman empire, periodically the gold coins of the realm were brought in... read more |
| DEBENTURE |
This is a form of long-term loan. A company issues debentures, usually at R1000 each, at a fixed percentage return. Debentures are then redeemable at a specified date, but in some... read more |
| DEBIT BALANCE |
A stockbroking account with no positions and a negative adjusted total equity. A debit balance typically arises as a result of a trader losing more money in the marketplace... read more |
| DEBSWANA |
Debswana Mining Company Limited (Debswana) is a 50/50 joint venture formed in 1969 between the government of Botswana and De beers. De beers is 85% owned by Anglo American. Debswana focuses on... read more |
| DEBSWANA DIAMOND MINING COMPANY LTD |
Debswana Mining Company Limited (Debswana) is a 50/50 joint venture formed in 1969 between the government of Botswana and De beers. De beers is 85% owned by Anglo American. Debswana focuses on... read more |
| DEBT |
Money owed by one person (natural or juristic) to another. Debt which is expected to be repaid withing normal commercial periods of 30, 60 or 90 days is... read more |
| DEBT CEILING |
A debt ceiling is a legally imposed limit to the amount of debt which the treasury of a country can uncur. In America the constitution (article 1,... read more |
| DEBT COVENANT |
An agreement reached by a company with its creditors for the repayment of principal and interest on its outstanding debts. Debt covenants give the dates on... read more |
| DEBT INSTRUMENT |
A form of long-term debt whereby the borrower agrees to pay the lender annual interest (the "coupon") until the debt is settled or converted into equity. Governments, state-owned... read more |
| DEBT LIMIT |
A debt ceiling is a legally imposed limit to the amount of debt which the treasury of a country can uncur. In America the constitution (article 1,... read more |
| DEBT MORATORIUM |
A period of grace on the repayment of debt and the interest due on it. If a company is placed under business rescue, then it is immune to any attempt to pursue its... read more |
| DEBT TO GDP RATIO |
This refers to the ratio between a country's government debt and its Gross Domestic Product (GDP). A low debt to GDP ratio suggests that a country's economy is producing... read more |
| DEBT TO INCOME RATIO |
This is the ratio of an individual's monthly debt repayments and other expenses to their gross income. In South Africa, we have an average debt to income ratio of 72,8% -... read more |
| DEBT TRAP |
A debt trap is when a borrower is in a cycle of re-borrowing or rolling over their debt. This can occur because of high interest rates or because the borrower cannot keep up with... read more |
| DEBT/EBITDA RATIO |
The ratio of a company's debt to its earnings before interest, taxation, depreciation and amortisation (EBITDA). This ratio is widely used by... read more |
| DEBT/EQUITY RATIO |
The ratio of shareholders' equity in the company (share capital and reserves) to the company's borrowing. The company has two primary sources of capital:... read more |
| DEBTOR |
An item on the balance sheet which shows the amount the company is owed, and which is to be paid over the short term. It is common for companies to allow their customers credit... read more |
| DEBTORS DAYS OUTSTANDING RATIO |
The average number of days that it takes for a company to collect its debts. This can be calculated by dividing the debtors figure and then multiplying by 365 (the number of days... read more |
| DEBTORS' BOOK |
A debtors' book is a collection of all the receivable invoices, i.e the cash that is due or owing to a business from it's clients. |
| DEBTORS' BOOK |
Amounts owing to the company, usually by customers who have bought products on credit. This is another term for "debtors" and appears in the balance... read more |
| DECLARATION DATE |
The date on which a dividend is declared by a company's board of directors once they have seen the results from the interim or final accounting period.... read more |
| DEEP-IN-THE-MONEY |
A deep-in-the-money call option has the strike price of the option well below the current price of the underlying instrument. A deep-in-the-money put option... read more |
| DEFAULT |
The failure to perform on a futures contract as required by exchange rules, such as a failure to meet a margin call or to make or take delivery. |
| DEFENSIVE SHARES |
Some JSE-listed companies perform well even in a recession and they are known as "defensive shares". Typically they are in sectors which the consumer cannot... read more |
| DEFERRED DELIVERY MONTH |
... read more |
| DEFERRED SHARE |
This is a share which has even less rights than an ordinary share. Preference shares receive their dividends and payments on liquidation of the company... read more |
| DEFERRED TAXATION |
When a company computes income tax expense, it bases that computation on taxable income per the Income Statement. The income taxes payable, a current liability... read more |
| DEFICIT |
This is the difference between government revenue and expenditure. Typically, governments spend more than they receive from taxes and other types... read more |
| DEFLATION |
The opposite of inflation. A period where the purchasing power of money increases in terms of a basket of goods and services. |
| DEFLATIONARY CRASH |
A crash which is caused or exacerbated by a shortage of money within the economy. There has only been one deflationary crash in recorded history and that was the 1929 crash. In... read more |
| DELAYED PRICES |
Market quotations which are delayed by the various futures exchange's required time period, usually 10-20 minutes. The JSE provides 15-minute delayed share... read more |
| DELAYED QUOTES |
Market quotations which are delayed by the various futures exchange's required time period, usually 10-20 minutes. The JSE provides 15-minute delayed share... read more |
| DELEVERAGED |
The opposite of "geared". Gearing in companies refers to the relationship between their borrowings and their equity. An ungeared company is one that has no debt. The... read more |
| DELINQUENT DIRECTOR |
This refers to a director of a company that has done something in contradiction of the Companies Act. Directors are expected to act in the "utmost good faith" and to act... read more |
| DELIVERY |
The transfer of the cash commodity from the seller of a futures contract to the buyer of a futures contract. Each futures exchange has specific procedures for delivery of... read more |
| DELTA |
The amount by which the price of an option changes for every dollar move in the underlying instrument. |
| DEMAND |
An economics term which refers to the extent to which a good or service is needed in the economy. When the good or service is widely needed and especially when there is limited... read more |
| DEMAND INDEX |
An index that shows the buying and selling power of markets and shares from mathematical calculations of volume and price ratios. |
| DEMATERIALISATION |
The replacement of physical share certificates with an electronic record. In South Africa this record is maintained by STRATE (Share TRAnsactions Totally Electronic). STRATE is... read more |
| DEMATERIALISED SCRIP |
The elimination of certificates or documents of title which represent ownership of securities, so that securities exist only as electronic records. |
| DEMERGER |
The breaking up of a company into smaller component companies. This is usually done to improve focus and to give each operating unit autonomy over decision making. It is also done to unlock... read more |
| DEMURRAGE |
This was originally a cost of not off-loading a chartered ship within an agreed time period. Shipping charters typically include an amount of "laytime" which is time allowed for unloading the... read more |
| DEPENDENCE |
In modern portfolio theory the central concept is that share prices are impossible to predict because there is no "dependence" between today's price and yesterday's price.... read more |
| DEPRECIATION |
The process of charging the value of a fixed asset against the company's profits at the same rate at which it is expected to wear out or become obsolete. It would not be... read more |
| DEPRESSION |
A economic term which refers to an extended period of very low economic activity. A depression is considerably worse and deeper than a recession. Recessions... read more |
| DEPTH OF THE MARKET |
The depth of the market for a particular share is a display of the best three bids and the best three offers for that share which have not yet been fulfilled. Stockbrokers,... read more |
| DERIVATIVE |
A financial instrument, traded on or off an exchange, the price of which is directly dependent upon the value of one or more underlying securities, equity indices,... read more |
| DESIGNATED ADVISOR |
When a company wishes to list on the Alt-X market it must appoint a designated advisor. The main role of a Designated Adviser is to... read more |
| DESTOCKING |
The reduction in a company's inventory levels. Inventory or stock is a part of a company's working capital and as such it means money tied... read more |
| DETREND |
To remove the general drift, tendency, or bent of a set of statistical data as related to time. |
| DEUTSCHER AKTIENINDEX |
This is a simple index of the thirty largest shares trading on the German stock exchange, based in Frankfurt. The DAX is a Paasche index which began on 30-12-1987 at a base... read more |
| DEVALUATION |
The reduction of a currency's value in a fixed exchange rate system. Most currencies are allowed to float and are freely traded with market forces determining their equilibrium... read more |
| DEVELOPING COUNTRY |
An economy which is in a development phase - as opposed to a first-world economy which is said to be fully developed. Emerging economies generally... read more |
| DEVELOPMENT BANK OF SOUTHERN AFRICA |
This is a state-owned enterprise which focuses on supporting projects which will enhance the standard of living and infrastructure of South Africa and the rest of Africa. It is... read more |
| DEVELOPMENT CAPITAL MARKET |
A division of the JSE which was folded into the Alt-X. This division was originally for smaller companies requiring less capital and no history of profits.... read more |
| DIAGONAL SHARE |
A share whose price chart goes from the bottom left-hand corner to the top right-hand corner. There are very few shares which can be described... read more |
| DIAMOND |
A solid crystalline form of carbon with the greatest hardness and heat conductivity of any natural substance. Diamonds have both industrial and jewellery use. The rarity of diamonds has given... read more |
| DIFFUSION INDEX |
An index that measures how many shares are positive or increasing in price. It can be used to tell the underlying strength of the market, if many shares are increasing... read more |
| DILUTED HEADLINE EARNINGS PER SHARE |
This is headline earnings per share (HEPS) calculated using the number of shares in issue at the end of the financial period rather than the... read more |
| DILUTION |
In the context of the share market, dilution occurs where a company issues additional shares without receiving commensurate earnings potential, resulting in lower... read more |
| DIRECT COST |
A cost in the books of a company which increases and decreases with their sales level. The main variable cost (also known as a "direct cost") is cost of sales. The cost of... read more |
| DIRECTIONAL MOVEMENT INDEX (DMI) |
Developed by J. Welles Wilder, DMI measures market trend. The concept of Directional Movement is based on the assumption that in an upward trend today's highest price is... read more |
| DIRECTOR |
All public companies are required to have at least two directors and all private companies at least one. The directors are appointed (and confirmed... read more |
| DIRECTOR DEALINGS |
The directors of a company are allowed to deal in the shares of their company, but in terms of the JSE rules, they must disclose the details of their transactions... read more |
| DIRECTORATE OF MARKET ABUSE (DMA) |
The DMA was formed in terms of the Insider Trading Act (135 of 1998) to investigate and take legal action where appropriate in cases of financial market abuse. It has been in operation... read more |
| DIRECTORS' REPORT |
The Companies Act requires companies to put before the Annual General Meeting (AGM) a directors' report with respect to the state of affairs of the business and profitability... read more |
| DISCLAIMED OPINION |
An audit opinion where the auditor refuses to give an opinion because he feels that he can place no reliance on the underlying financial accounts. There are four types of... read more |
| DISCLAIMER |
This is an audit opinion given when the auditor cannot obtain sufficient documents and information to support their opinion. This can happen because management... read more |
| DISCLOSURE |
The concept of disclosure is entrenched in the Companies Act. The Act is concerned to ensure that shareholders are properly informed of all the information that they need to make... read more |
| DISCONTINUED OPERATIONS |
Companies are always trying to be focused on their core business. To achieve this they may decide from time to time that a particular division or subsidiary is no longer... read more |
| DISCOUNT BROKER |
This is a stockbroking firm that does not undertake research into listed companies or give advice. For this reason the dealing costs through a discount broker is much... read more |
| DISCOUNT WINDOW |
The mechanism by which the central bank provides short-term funds to commercial banks and other eligible institutions. Originally, central banks had an actual window through which... read more |
| DISCOUNTED CASH FLOW |
A process whereby a future flow of incomes is reduced to a current value by applying an "internal rate of return" (IRR). For example, if you are looking at a share and your... read more |
| DISCOUNTING |
The price of a share is the average of all investors' discounted cash flows of the future dividends of the company. If... read more |
| DISCOURAGED WORKER |
This is an adult person who is part of a country's labour force but who has not been able to find work for an extended period of time. Such people would like to work but have given up looking... read more |
| DISCRETIONARY STOCKBROKING ACCOUNT |
An account opened with a stockbroker where the client has entered into an arrangement with the stockbroker that authorises the stockbroker to conduct transactions on the client's behalf... read more |
| DISINVESTMENT |
This term is usually applied to investors in South Africa who decide to withdraw their investment. Disinvestment impacts directly on the capital account of the Balance of... read more |
| DISPOSABLE INCOME |
The income which is left for a consumer after all his main expenses have been met - such as his rent or mortgage bond repayment, money for food and clothing, school fees, insurance, taxation,... read more |
| DISSENTING SHAREHOLDER |
In terms of the Companies Act, a dissenting shareholder is one who disagrees with a fundamental transaction being contemplated by the majority shareholders.... read more |
| DISSOLUTION |
The process whereby a company is dissolved. The court, the company itself, a shareholder, the Master of the court, the business rescue practitioner, a creditor, or the minister may initiate such... read more |
| DISSOLVED |
To settle the affairs of a company/firm by selling assets in order to pay creditors. When a company is liquidated, ordinary shareholders are entitled to receive their... read more |
| DISTRESSED COMPANY |
This refers to a company which does not have sufficient short-term cash flow to meet its immediate expenses. When a company is in "financial distress",... read more |
| DISTRIBUTABLE RESERVES |
A concept from the old Companies Act which aimed to preserve the capital of companies. In terms of that Act, dividends could only be paid out of a company's profits and not out of its asset base.... read more |
| DISTRIBUTED LEDGER TECHNOLOGY |
Distributed Ledger Technology (DLT) is a computer technique which is used to create a completely reliable and and 'unhackable' database. The most common use is for the "blockchain" directories... read more |
| DISTRIBUTION |
|
| DISTRIBUTION |
That portion of a company's earnings which is paid out to shareholders - also sometimes called a "distribution". Most blue chip companies... read more |
| DISTRIBUTION AREA |
A sideways to downward market, usually at the top of a bull trend where shares are being sold off by the "smart money" in anticipation of a downward trend. |
| DIVERGENCE |
When two or more averages or indices fail to show confirming trends. |
| DIVERSIFICATION |
The process whereby a company (or individual) spreads its investments among a number of different enterprises so as to reduce its exposure through one of them. Research conducted in America has... read more |
| DIVESTITURE |
Companies are always trying to be focused on their core business. To achieve this they may decide from time to time that a particular division or subsidiary is no longer... read more |
| DIVIDEND |
That portion of a company's earnings which is paid out to shareholders - also sometimes called a "distribution". Most blue chip companies... read more |
| DIVIDEND COVER |
The number of times the dividend could be taken out of the earnings. For example, if a company has earnings (profits) of R50 000 and pays out a dividend of R5 000 then the dividend cover is 10... read more |
| DIVIDEND EQUALISATION RESERVE |
A distributable reserve which is specifically set up to ensure that dividends remain stable despite changes in earnings. If a company normally pays a dividend of 10 cents per share, the directors... read more |
| DIVIDEND POLICY |
Most of the larger listed blue chip companies pay two dividends each financial year - an interim and final. They also usually have a dividend policy - which means that they pay out a set percentage... read more |
| DIVIDEND REINVESTMENT PLAN |
A program offered by a publicly held company in which dividends are used to buy more shares of the company. This process reduces the number of shares in issue since the shares which are bought... read more |
| DIVIDEND STRIPPING |
This occurs where a share is bought just before the last day to register (LDR) for its dividend and then sold immediately afterwards. The dividend is effectively stripped out. The problem with... read more |
| DIVIDEND WITHHOLDING TAX |
A 20% tax (as per the 2017 budget speech) on dividends paid by all South African taxpayers, but withheld by the company paying the dividend. DWT obviously reduces the returns... read more |
| DIVIDEND YIELD |
Dividends per share expressed as a percentage of the current market price. For example, if a company pays a dividend of R10 000 and it has... read more |
| DIVIDENDS PER SHARE |
The ordinary dividend of a company for the most recent financial year divided by the number of shares in issue. The DPS is calculated from the most recent year's dividends paid - so that means... read more |
| DJIA |
Charles Dow was the first person to construct an index. His first index was the "transportation average" which he constructed in 1884 and then maintained as a director of the Dow Jones Company.... read more |
| DLT |
Distributed Ledger Technology (DLT) is a computer technique which is used to create a completely reliable and and 'unhackable' database. The most common use is for the "blockchain" directories... read more |
| DMA |
The DMA was formed in terms of the Insider Trading Act (135 of 1998) to investigate and take legal action where appropriate in cases of financial market abuse. It has been in operation... read more |
| DOJI |
A candlestick charting term which describes a trading session in which the opening price and closing price for a share are the same (or almost the same). Different... read more |
| DOJI STAR |
A Doji Star is a trend reversal pattern which is composed of a long black body followed by a doji (a pattern with the same opening and closing price). It may be recognized because it consists... read more |
| DOMESTIC UNIT TRUST |
A unit trust which is focused on investments into the local equity market. In other words, excluding overseas investments. Profile Media has an index of such unit trusts which it maintains calle... read more |
| DORE |
An alloy of gold and silver usually created at the mine before being moved to the refinery. Dore is usually cast in bars of bullion. At the refinery it is processed further. |
| DOT COM |
Technology shares, specifically those which deal with internet based products or telecommunications. From 1997 to 1998, these shares did particularly well during the hype and excitement over... read more |
| DOUBLE BOTTOM |
The price action of a security or market average where it has declined twice to the same approximate level, indicating the existence of a support level and... read more |
| DOUBLE COUNTING |
An economics term which means counting the same item twice so producing an erroneous result. This can happen with the calculation of gross domestic product (GDP) or other important economic statistics... read more |
| DOUBLE SMOOTHING |
Double smoothing in the context of the share market and technical analysis simply means making a moving average of a moving average. This has the effect of smoothing the trend even further. The... read more |
| DOUBLE TAXATION AGREEMENT |
An agreement between two countries the objective of which is to avoid double taxation. For example, South Africa and the UK have a double taxation agreement which they entered into in 2002. The... read more |
| DOUBLE TOP FORMATION |
A price pattern seen on a chart at the top of a trend. The pattern occurs when prices rise to a resistance level on significant... read more |
| DOUBLE-SMOOTHED |
A price series that has been smoothed by a mathematical technique such as a moving average. This first series of smoothed price data is then smoothed a second time. |
| DOUBTFUL DEBT |
A debt which may not be collectible. Companies usually distinguish between bad debts, which they know they cannot collect, and doubtful debts which may not be collected because they are already... read more |
| DOVE |
A member of a country's monetary policy committee (MPC) who is in favour of reducing interest rates to stimulate the economy. The monetary policy committee is made up of experienced... read more |
| DOW CHARLES |
Charles Dow was one of the founders of Dow Jones & Co. and the originator of the famous Dow Jones indexes. He developed the "Dow Theory" of market movements and is regarded... read more |
| DOW JONES INDUSTRIAL AVERAGE |
Charles Dow was the first person to construct an index. His first index was the "transportation average" which he constructed in 1884 and then maintained as a director of the Dow Jones Company.... read more |
| DOW THEORY |
The Dow Theory was the first technical analysis idea to be invented in Western markets (the Japanese invented candlestick charts much earlier). Charles Dow, working... read more |
| DOWNSIDE BREAK |
In technical analysis, this occurs where a security's price encounters a support level which prevents it from going lower for a period.... read more |
| DOWNTREND |
A period when the price of a share (index or other security) falls. Normally a downtrend can be clarified with the addition of a downward... read more |
| DOWNWARD TAIL |
A candlestick charting term which refers to the extent to which a share's price trades below its open, in a green candle or its close in a red candle. In candlestick charting the candle is coloured... read more |
| DOWNWARD TREND |
A period when the price of a share (index or other security) falls. Normally a downtrend can be clarified with the addition of a downward... read more |
| DOWNWARD TREND |
A long downward trend in a share's price, a sector's index, the all-market index or other indicator. Bear trends and... read more |
| DPS |
The ordinary dividend of a company for the most recent financial year divided by the number of shares in issue. The DPS is calculated from the most recent year's dividends paid - so that means... read more |
| DRAGONFLY DOJI |
A candlestick charting term used to describe a type of doji which signifies indecision. The dragonfly doji has a long lower shadow with no upper shadow, signifying either bullish or bearish sentiment... read more |
| DRAWDOWN |
The reduction in account equity as a result of a trade or series of trades. |
| DTA |
An agreement between two countries the objective of which is to avoid double taxation. For example, South Africa and the UK have a double taxation agreement which they entered into in 2002. The... read more |
| DUAL CAPACITY TRADING |
Dual capacity trading was introduced following the deregulation of the JSE in 1995. It means that a stockbroker may act as a principal and as an agent in share dealing activities. In terms of... read more |
| DUAL LISTING |
This is where a company is listed on two stock exchanges. On the JSE there are dozens of companies which are also listed on at least one other stock exchange for a variety of reasons. Some of... read more |
| DUE DILIGENCE |
The checking of the books of account of a prospective acquisition to ensure that what was held out by its directors corresponds with the reality. It is a standard procedure of all acquisitions... read more |
| DUMPLING 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 |
| DURABLE GOODS |
Products, offered to consumers, which are expected to last for a considerable period of time and which are generally more highly priced. Examples range from "white goods" like fridges, stoves... read more |
| DUTY |
The tax paid on the import of foreign-made products into a country according to a specific import tariff. In general, countries try to avoid having too many onerous tariffs on imports because... read more |
| DWT |
A 20% tax (as per the 2017 budget speech) on dividends paid by all South African taxpayers, but withheld by the company paying the dividend. DWT obviously reduces the returns... read more |
| DY |
Dividends per share expressed as a percentage of the current market price. For example, if a company pays a dividend of R10 000 and it has... read more |
| EAO |
This is an order handed down by a court in terms of which an amount may be deducted from an employee's income for the repayment of a creditor. Thousands of salary-earners have EAOs against their... read more |
| EARLY ENTRY |
A large price movement in one direction within the first 15 minutes after the open of the daily session. |
| EARMARKING |
The setting aside of funds by an organisation or individual for a specific purpose. In the context of government expenditure, funds collected from a specific source can be earmarked to be spent... read more |
| EARNINGS |
The earnings of a company are its profits. They are calculated by deducting the expenses of a period from the incomes of the same period.... read more |
| EARNINGS BEFORE INTEREST AND TAXATION |
This earnings figure, better known as EBIT, shows the company's earnings before the cost of interest-bearing debt and taxation. It does not exclude the cost of assets (depreciation) or impairments... read more |
| EARNINGS BEFORE INTEREST, TAXATION, DEPRECIATION AND AMORTISATION |
This is shortened to EBITDA and it shows the company's profits before non-operational costs. This allows investors to see the company's operating performance. Some companies... read more |
| EARNINGS ESTIMATES |
The estimated earnings projected for a company for a fiscal year. Estimating future earnings is an art. It depends on both internal factors within the company such as working capital management,... read more |
| EARNINGS MULTIPLE |
The market price of a share divided by its most recent average annual earnings per share. This gives the reciprocal of the "earnings... read more |
| EARNINGS PER SHARE |
A company's earnings (profit) divided by the number of ordinary shares usually expressed as a number of cents per share. The earnings per share (EPS) includes all the companies... read more |
| EARNINGS YIELD |
Earnings per share expressed as a percentage of the current market price of the share. For example, a company with 25 cents earnings... read more |
| EBIT |
This earnings figure, better known as EBIT, shows the company's earnings before the cost of interest-bearing debt and taxation. It does not exclude the cost of assets (depreciation) or impairments... read more |
| EBITDA |
This is shortened to EBITDA and it shows the company's profits before non-operational costs. This allows investors to see the company's operating performance. Some companies... read more |
| ECB |
The Central Bank for the European Union. |
| ECONOMETRICS |
This is the application of statistics and probability to economic data. Like all social sciences, economics is measuring the behaviour of people and developing rules based on their behavioural... read more |
| ECONOMIC CONTRACTION |
A cyclical period of lower economic activity, occurring at regular intervals; as opposed to a depression, which is a period of major economic downturn with high unemployment... read more |
| ECONOMIC GROWTH |
In the context of economics, this refers to the increase in a country's gross domestic product (GDP). GDP growth is impacted by many things, but mainly... read more |
| ECONOMIC INDEX |
Every week there are a variety of economic indicators which are published. The Business Day runs a special column on Mondays explaining which indicators are going to be published that week and... read more |
| ECONOMIC INDICATORS |
Every week there are a variety of economic indicators which are published. The Business Day runs a special column on Mondays explaining which indicators are going to be published that week and... read more |
| ECONOMIC SANCTIONS |
Economic penalties which are imposed on one country, organisation or individual by one or more countries with the objective of getting that country, organisation or individual to change their... read more |
| ECONOMIC STIMULUS |
A mechanism to encourage economic activity within the economy. The Monetary Policy Committee (MPC) meets every two months to decide whether to reduce... read more |
| ECONOMICS |
The study of the allocation of scarce resources within a country and between countries. Economics is a social science because it looks at human behaviour... read more |
| ECONOMIES OF SCALE |
Achieving economies of scale is the objective of every manufacturing business, because it substantially reduces costs and increases profitability. There is a distinct advantage to size in manufacturing,... read more |
| ECONOMY |
The economy of a country is the aggregate of all economic activity within that country. It is measured in various ways to determine whether it is growing or shrinking.... read more |
| EESE |
The Equities Express Securities Exchange (EESE) was the fifth stock exchange to register in South Africa and it only does primary listings. It is mainly focused on BEE shares offered by companies... read more |
| EFFECTIVE INTEREST RATE |
The interest coupon on a bond expressed as a percentage of its current price. Thus, a R1m bond with a coupon of 10% would earn R100 000 per annum, but if the price of the bond falls to R900 000... read more |
| EFFECTIVE TAXATION RATE |
This is the percentage of its taxable income that a company pays to the Receiver. The Income Tax Act allows companies to deduct certain initial and investment allowances when they purchase... read more |
| EFFICIENT MARKET |
The basis of modern portfolio theory, the efficient market hypothesis, maintains that all information is already discounted by the market and reflected in share prices due to market participants... read more |
| EFFICIENT MARKET THEORY |
The basis of modern portfolio theory, the efficient market hypothesis, maintains that all information is already discounted by the market and reflected in share prices due to market participants... read more |
| EIA |
The EIA describes itself as, "The U.S. Energy Information Administration (EIA) collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking,... read more |
| ELASTICITY |
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| ELECTRONIC ORDER |
An order placed electronically (without the use of a broker) either via the Internet or an electronic trading system. |
| ELECTRONIC SCRIP REGISTER |
After dematerialisation in South Africa, physical share certificates were replaced by an electronic record and share registers were replaced by an electronic scrip register. Obviously, the electronic... read more |
| ELECTRONIC SETTLEMENT |
Settlement of securities transactions on a T+3 rolling contractual settlement cycle through STRATE, the electronic settlement system. |
| ELECTRONIC TRADING HOURS |
The U.S. after-hours markets during the evenings. Futures contracts trading during ETH do so on electronic trade matching platforms such as Globex or A/C/E. |
| ELECTRONIC TRADING SYSTEMS |
Systems that allow participating exchanges to list their products for trading after the close of the exchange's open outcry trading hours (i.e., Chicago Board of Trade's A/C/E, Chicago Mercantile... read more |
| ELLIOT IMPULSE WAVE |
The strong moves in Elliot Wave theory which move in the direction of the larger degree wave. In Elliot Wave theory there ware two types of waves: impulse and corrective. Impulse waves are the... read more |
| ELLIOTT WAVE |
A pattern-recognition technique published by Ralph Nelson Elliott in 1939, which holds that the stock market follows a rhythm or pattern of five waves up and three waves down to form a complete... read more |
| ELLIOTT WAVE THEORY |
A pattern-recognition technique published by Ralph Nelson Elliott in 1939, which holds that the stock market follows a rhythm or pattern of five waves up and three waves down to form a complete... read more |
| EMBEDDED DERIVATIVE |
This is a derivatives contract that is made part of a commercial agreement. The idea is that the derivative contract only comes into play if and when, certain conditions are met. The objective... read more |
| EMBEDDED VALUE |
Thi is an insurance term which means the current value of future earnings plus net asset value (NAV). Embedded value approximates the value of the shareholder's interest in the company - and... read more |
| EME |
An exempted micro enterprise (EME) is a small business in South Africa that is exmpted from the requirements of the Broad Based Balck Economic Empowerment Act (53 of 2003) because of its small... read more |
| EMERGING MARKET |
An economy which is in a development phase - as opposed to a first-world economy which is said to be fully developed. Emerging economies generally... read more |
| EMERGING MARKETS INDEX |
An average index of the stock markets of emerging economies produced and maintained by Morgan Stanley Capital International (MSCI). It is weighted 40,95% China, 12,28% Taiwan, 11,61% Korea, 8,02%... read more |
| EMISSIONS |
Those gaseous emissions which contribute to global warming and climate change by trapping solar energy inside the atmosphere. The burning of fossil fuels is the main contributor to these emissions.... read more |
| EMOLUMENTS ATTACHMENTS ORDER |
This is an order handed down by a court in terms of which an amount may be deducted from an employee's income for the repayment of a creditor. Thousands of salary-earners have EAOs against their... read more |
| EMPHASIS OF MATTER |
An audit opinion which is specifically meant to draw attention to a particular point in the financials. Listed companies which have an emphasis of matter are marked with the letter "E" by the... read more |
| EMPLOYEE |
A person who exchanges their time and skill for a salary or wage. Labour is one of the four factors of production and every adult can engage in employment to earn their living. The more highly... read more |
| EMPLOYEE SHARE INCENTIVE SCHEME |
Most listed companies use their shares to motivate their employees through an employee share option scheme. This usually involves the employee getting options to buy a certain quantity of shares... read more |
| EMPLOYMENT EQUITY ACT |
This Act is aimed at redressing the wrongs of the Apartheid era and ensuring that employment is not racially based. It does this by trying to ensure that companies above a certain size (with... read more |
| EMPLOYMENT TAX INCENTIVE ACT |
An Act designed to incentivise employers to employ young people in the economy. The Employment Tax Incentive Act (26 of 2013), which is also called the Youth Employment Tax Incentive,... read more |
| ENCUMBERED |
The word "encumbered" is applied to assets which are bonded or otherwise used as security to cover a loan. |
| END OF DAY PRICE |
This is the closing price of a share at the end of the trading day. Most software available to private investors makes use of end of day data. The JSE provides... read more |
| ENDOWMENT |
An endowment insurance policy is a type of savings/investment. A pure endowment offers no risk or term insurance. The problem with these policies is that they generally give a very low return... read more |
| ENERGY INFORMATION ADMINISTRATION (EIA) |
The EIA describes itself as, "The U.S. Energy Information Administration (EIA) collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking,... read more |
| ENGULFING GREEN |
A bottom candlestick reversal signal, this is a two candlestick pattern consisting of a large green candle enveloping a preceding red candle. This pattern implies that the trend... read more |
| ENGULFING PATTERN |
In candlestick terminology, a multiple candlestick line pattern; a major reversal signal with two opposing-color real bodies making up the pattern (also referred to as a tsutsumi). An engulfing... read more |
| ENTREPRENEUR |
This is a "go-getter" who establishes and runs a business for his own account and shares in the risks and profits. |
| ENTRY |
The point at which a trader gets into a position in the market. |
| ENTRY THRESHOLD |
This is the cost of establishing a new business in a particular industry. Some industries require a considerable capital investment to be viable and so have a high entry threshold. For example,... read more |
| ENVELOPE |
Lines surrounding an index or indicator - also called trading bands. For example Bollinger Bands. |
| EPS |
A company's earnings (profit) divided by the number of ordinary shares usually expressed as a number of cents per share. The earnings per share (EPS) includes all the companies... read more |
| EQUILIBRIUM |
A price region that represents a balance between demand and supply. This is a microeconomics term which suggests that in any free market supply and demand are opposing forces which reach a balance... read more |
| EQUILIBRIUM MARKET |
A price region that represents a balance between demand and supply. This is a microeconomics term which suggests that in any free market supply and demand are opposing forces which reach a balance... read more |
| EQUITY |
That portion of share capital which carries risk, and shares in profits through dividends that are dependent on profitability.... read more |
| EQUITY ACCOUNTING |
When a company owns more than 20% of another company, then in terms of IAS 28, that company is an associate company and it must be valued at its cost plus any increase in net asset value. Investments... read more |
| EQUITY EXPRESS SECURITIES EXCHANGE |
The Equities Express Securities Exchange (EESE) was the fifth stock exchange to register in South Africa and it only does primary listings. It is mainly focused on BEE shares offered by companies... read more |
| EQUITY 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 |
| EQUITY SHARE |
Also sometimes called "equity" shares, these shares share in the profits and risks of the company. Unlike the fixed dividend paid to preference shareholders, the ordinary dividend is decided... read more |
| EQUIVOLUME CHART |
Created by Richard W. Arms in 1963, a chart in which the vertical axis is the high-low range for each day, while the horizontal axis represents the volume of shares of stock or the number of... read more |
| ESCROW |
An escrow account is one which is under the control of a third party (usually an attorney) who then determines when the funds can be released for payment based on specified conditions. Escrow... read more |
| ESTATE DUTY |
A tax on a deceased estate. In South Africa, estate duty is 20% on the first R30m of an estate and then 25% on any amount above that. |
| ESTIMATED EPS CHANGE |
Change in estimated mean earnings per share for the current fiscal year from the last month, last three months and last six months to the current month. |
| ETF |
Collections of securities that are bought and sold as a package on an exchange. Essentially, buying an ETF means tracking a group or "basket" of... read more |
| ETN |
A debt security traded on a stock exchange. An exchange trade note (ETN) is similar to an exchange traded fund (ETF) in that they both track underlying assets and both are traded on a stock exchange... read more |
| EURIBOR |
This is abreviated to "euribor" and it is an interest rate which is based on the average rates for unsecured funds at European banks. It is Europe's equivalent of the London interbank offer rate... read more |
| EURO INTERBANK OFFERED RATE |
This is abreviated to "euribor" and it is an interest rate which is based on the average rates for unsecured funds at European banks. It is Europe's equivalent of the London interbank offer rate... read more |
| EURODOLLAR |
Dollars deposited in foreign banks, with the futures contract reflecting the rates offered between London branches of top US banks and foreign banks. |
| EURONEXT |
The largest share market in Europe which maintains exchanges in Amsterdam, Paris, London, Dublin, Oslo, Brussels and Lisbon. Euronext has both equity and derviative markets as well as bond and... read more |
| EUROPEAN CENTRAL BANK |
The Central Bank for the European Union. |
| EUROPEAN OPTION |
... read more |
| EUROPEAN UNION (EU) |
The principal goal of the EU has been to establish a single European currency called the Euro, to officially replace the national currencies of the member EU countries. On January 1, 1999,... read more |
| EUROSTOXX |
The Eurostoxx 50 index is an index (weighted average) of the 50 largest and most liquid stocks trading in the Eurozone. It is just one of the indexes offered by Stoxx - which is owned by the... read more |
| EVASION |
A criminal offence committed by someone who does not declare their tax position correctly in their tax return, thereby defrauding The Receiver of of Revenue of taxes due. Evasion differs from... read more |
| EVENING STAR |
A candlestick formation which is the bearish counterpart of the morning star pattern; a top reversal, it should be acted on if it arises after an uptrend. The morning star and evening star formations... read more |
| EX OFFICIO DIRECTOR |
This is a person who is deemed to be a director by virtue of his office or function within an organisation. Section 66 (4) (a) (ii) of the Companies Act (71 of 2008) states: "a person to be an... read more |
| EX-DIV |
A share is "ex div" once the last day to trade has passed. Any sales after the last day to trade are done on the basis that the dividend accrues... read more |
| EX-DIVIDEND DATE |
The day on which the right to receive a current dividend is not automatically transferred to a buyer. This is usually the Monday after the last day to register for the dividend. On this day the... read more |
| EXCHANGE |
A securities exchange that is properly formulated and run in accordance with an Act of Parliament. The Johannesburg Securities Exchange (JSE) is... read more |
| EXCHANGE CONTROL |
This is a set of rules and limitations placed on the trade in foreign currencies. The normal objective of exchange control is to enable the government to stabilise the flow of funds into and... read more |
| EXCHANGE RATE |
An exchange rate is the rate at which one currency can be traded for another. Thus, for example, the rand trades against the US dollar at rates which fluctuate... read more |
| EXCHANGE TRADED FUND |
Collections of securities that are bought and sold as a package on an exchange. Essentially, buying an ETF means tracking a group or "basket" of... read more |
| EXCHANGE TRADED NOTE |
A debt security traded on a stock exchange. An exchange trade note (ETN) is similar to an exchange traded fund (ETF) in that they both track underlying assets and both are traded on a stock exchange... read more |
| EXEMPT INCOME |
In terms of the Income Tax Act natural persons (i.e. not corporate entities) do not have to pay tax on interest income from a South African source up to R23800 per annum (and R34500 for people... read more |
| EXEMPT SUPPLIES |
South Africa has Value Added Tax of 15% which is levied on all products except for what are known as "exempt supplies" - which include education, after-care for children, rentals, and certain... read more |
| EXEMPTED MICRO ENTERPRISE |
An exempted micro enterprise (EME) is a small business in South Africa that is exmpted from the requirements of the Broad Based Balck Economic Empowerment Act (53 of 2003) because of its small... read more |
| EXERCISE |
The process by which the holder of an option makes or receives delivery of shares of the underlying security. |
| EXHAUSTION 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 high price - this shows on the chart as a gap... read more |
| EXIT |
The point at which a trader closes out of a trade. |
| EXPANSIONARY POLICY |
A policy of the Reserve Bank's Monetary Policy Committee (MPC) to stimulate the economy by reducing interest rates and other expansionary monetary policies such as buying back government bonds... read more |
| EXPENDITURE |
This is an economics term which refers to the total expenditure within the economy. It is a method of calculating gross domestic product. The formula is: Gross Domestic Product = Consumer... read more |
| EXPENSE |
This something which a company has to pay for. Companies have two types of expenses - those which go up and down with sales and those which have to be paid even if there are no sales.... read more |
| EXPENSE RATIO |
This is a ratio used in the insurance industry to establish the direct costs associated with acquiring, servicing and underwriting the premiums earned by the company. These costs could include... read more |
| EXPENSIVE |
A term used by analysts and investors to describe a share which is trading above what they perceive to be its real value. Obviously, this... read more |
| EXPIRATION DATE |
Generally the last date on which an option may be exercised. It is not uncommon for an option to expire on a specified date during the month prior to the delivery month for the underlying futures... read more |
| EXPONENTIAL MOVING AVERAGE |
An exponential moving average (EMA) is one in which the latest prices in the moving average are weighted much more heavily than the oldest prices. The weighting varies over the period of the... read more |
| EXPONENTIAL SMOOTHING |
A mathematical-statistical method of forecasting that assumes future price action is a weighted average of past periods; a mathematic series in which greater weight is given to more recent price... read more |
| EXPONENTIAL WEIGHTING |
Moving averages are the most basic form of line chart in technical analysis. They are more commonly used in conjunction with other indicators than as indicators in their own right. One of the... read more |
| EXPORT |
The sale of products produced locally in foreign markets generating an inflow of foreign currency. The value of a country's imports is subtracted... read more |
| EXPORT LED |
A term used by economists to explain the fact that economic booms in South Africa are generally caused by a strong recovery in commodity exports and prices. This is because... read more |
| EXPOSED |
The degree to which a portfolio or other investment is susceptible to risk from certain factors. For example, a share in a company whose main business is importing would be highly "exposed" to... read more |
| EXPOSURE |
The degree to which a portfolio or other investment is susceptible to risk from certain factors. For example, a share in a company whose main business is importing would be highly "exposed" to... read more |
| EXPRESSION OF INTEREST |
An expression of interest (EOI) is an approach by an acquisitive company which seeks to acquire another company. They would first send an EOI - and then engage in discussions with the target... read more |
| EXPROPRIATION OF LAND |
The compulsory taking over of land by the government of a country. In most capitalist countries the right... read more |
| EXTRAORDINARY ITEM |
An Income Statement item which shows an expense or income which is not part of the company's normal business. For example, if a supermarket chain sells a piece of land and makes a profit, then... read more |
| EXTREME POVERTY |
The worst level of poverty defined by the World Bank as an income per person of less than $1.25 per day. About one fifth of people living in developing countries are in extreme poverty... read more |
| EY |
Earnings per share expressed as a percentage of the current market price of the share. For example, a company with 25 cents earnings... read more |
| FACE OF THE ACCOUNTS |
The actual income statement and balance sheet - as opposed to the notes to those accounts. Certain information is always shown on the face of the... read more |
| FACE VALUE |
The dollar value of a U.S. Treasury Bill at maturity. T-Bills are issued at a discount to face value and gradually increase in value until reaching the full face value on the maturity date. |
| FACTOR |
A mechanism for financing a business by selling its debtors' book to a financing company, known as a "factor", usually at a significant discount. This method of finance is usually far more expensive... read more |
| FACTOR MARKET |
A market for one of the factors of production. Traditionally in economics there are four factors of production identified - labour, land, capital and entrepreneurial ability. Each of these factors... read more |
| FACTORING |
A mechanism for financing a business by selling its debtors' book to a financing company, known as a "factor", usually at a significant discount. This method of finance is usually far more expensive... read more |
| FACTORS OF PRODUCTION |
An economics concept which refers to the four broad categories of scarce resources used in the economy. Those resources are land, labour, capital and entrepreneurial ability. All products and... read more |
| FACTORY OUTPUT |
An economic indicator which measures the output from manufacturing. Manufacturing production is measured and published monthly. Following the COVID-19 pandemic, manufacturing production in South... read more |
| FADE |
Selling a rising price or buying a falling price. A trader fading an up opening would be short, for example. |
| FAILED STATE |
The governing ability of a failed state is weakened to an extent where it is unable to fulfil the organisational and administrative functions required to control people. The State can only provide... read more |
| FAILED TRADE |
A securities trade in equities, bonds or other securities where either the seller fails to supply the security of the buyer fails to supply the cash within the required time-frame. The JSE has... read more |
| FAILURE |
... read more |
| FAILURE SWINGS |
The inability of price to reaffirm a new high in an uptrend or a new low in a downtrend. |
| FAIR VALUES |
(1) A value for the shares of dissenting shareholders in determining their appraisal rights. The Companies Act (71 of 2008) allows minority shareholders the right to have their shares bought... read more |
| FAIS |
This Act (37 of 2002) tries to protect the public from financial advisors and those who sell financial/investment products. It substantially increases the accountability and disclosure of financial... read more |
| FALLING THREE METHODS |
A candlestick formation which occurs in an established bear trend and which is used to predict the continuation of that trend. This formation begins with a long red candle within a downtrend.... read more |
| FAMILY GROUP |
A holding company which is currently owned and controlled by a single family. There are many such companies listed on the JSE. Here a company is started by an entrepreneur and then grown over... read more |
| FANG |
The four new high-tech companies which are dominating the New York Stock Exchange. They are Facebook, Amazon, Netflix and Google. All four companies are growing quickly and are deeply invested... read more |
| FAST MARKET |
A declaration that market conditions in the futures pit are so disorderly temporarily to the extent that floor brokers are not held responsible for the execution of orders. |
| FAST MOVING CONSUMER GOODS |
This is a category of retailers which sell products that have a relatively short sales cycle - like groceries, clothing and small appliances. Typical examples would be Pick 'n Pay, Woolies, Shoprite,... read more |
| FDI |
All investment into South Africa by foreigners. FDI is a very important factor in the South African economy. We have some tremendous successes and some dismal failures. The successes... read more |
| FED |
The governing central bank of the US. There are twelve regional federal reserve banks in America, located in Boston, New York, Philadelphia, Cleveland,... read more |
| FEDERAL DEPOSIT INSURANCE CORPORATION |
A self-sustaining, independent executive agency established to insure deposits of all US banks entitled to federal deposit insurance, as stated by the Federal Reserve Act. |
| FEDERAL OPEN MARKET COMMITTEE |
The policy making committee of the Federal Reserve Bank. They meet on a regular basis, every other Monday to make decisions on US economic policy. These meetings are open to the public. Specifically... read more |
| FEDERAL RESERVE BANK |
The governing central bank of the US. There are twelve regional federal reserve banks in America, located in Boston, New York, Philadelphia, Cleveland,... read more |
| FENCE |
An options startegy which uses three contracts to establish a range around a security or commodity. It locks in the value of a position but sacrifices some of the upside potential in doing so.... read more |
| FENCE STRATEGY |
An options startegy which uses three contracts to establish a range around a security or commodity. It locks in the value of a position but sacrifices some of the upside potential in doing so.... read more |
| FERRO-CHROME |
... read more |
| FIA |
The US national trade association for Futures Commission Merchants. The FIA is the only association representative of all organisations that have an interest in the futures market in the US.... read more |
| FIAT CURRENCY |
All currencies were originally commodity currencies - which means that they had the value inherent in the commodity which they were made of. Thus, a gold coin was worth the value of its gold... read more |
| FIBONACCI RATIO |
The ratio between any two successive numbers in the Fibonacci sequence, known as phi (f). The ratio of any number to the next higher number is approximately 0.618 (known as the Golden Mean or... read more |
| FIBONACCI SEQUENCE |
The sequence of numbers (0, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233...), discovered by the Italian mathematician Leonardo de Pisa in the 13th century and the mathematical basis of the Elliott... read more |
| FICA |
This Act (38 of 2001) is known as FICA and it came into effect on 1st July 2001. The objective is to combat crimes such as tax evasion and money laudering and it is similar to legislation in... read more |
| FIFO |
The "first in first out" method of valuing stocks. The assumption is made that the oldest stock is sold first when valuating what remains at the end of the accounting period. |
| FILL |
An executed order; sometimes the term refers to the price at which an order is executed. |
| FILL OR KILL |
(FK) means the full order must be executed immediately or otherwise cancelled. |
| FILL ORDER |
An order that must be filled immediately (or cancelled). |
| FILTER |
A device or program that separates data, signal or information in accordance with specified criteria. So a charting program typically contains a filter of some sort which allows the user to search... read more |
| FILTER POINT |
The time at which a portfolio insurance program makes an adjusting trade. |
| FINAL ACCOUNTS |
Sometimes known as an Annual Report or just the "financial statements", this is a document required by the Companies Act (71 of 2008) to be... read more |
| FINAL CONSUMPTION EXPENDITURE |
A national accoutns figure which includes that expenditure which is undertaken by individuals and companies within a country or whose main business is inside the country to satisfy needs and... read more |
| FINAL DIVIDEND |
The dividend paid when the directors know what the final profit for the year will be. Added to the interim dividend, this gives the total dividend for the year. |
| FINAL FINANCIAL STATEMENTS |
Sometimes known as an Annual Report or just the "financial statements", this is a document required by the Companies Act (71 of 2008) to be... read more |
| FINAL GOOD |
A "good" or product which is consumed rather than used to create another product. This is as opposed to intermediate goods which are used in the manufacture of other products. |
| FINAL RESULTS |
Sometimes known as an Annual Report or just the "financial statements", this is a document required by the Companies Act (71 of 2008) to be... read more |
| FINALS |
Sometimes known as an Annual Report or just the "financial statements", this is a document required by the Companies Act (71 of 2008) to be... read more |
| FINANCE COSTS |
A disclosable expense which comes about as a result of a company having interest-bearing debt. Finance costs are usually disclosed on the Income Statement as a net figure (i.e. interest paid... read more |
| FINANCIAL ACCOUNTING |
A set of conventions for recording and gathering financial transactions in an organisation. The academic discipline which is accountancy has established a set... read more |
| FINANCIAL ADVISOR |
To become a certified financial planner (CFP) you must have a post-graduate qualification from one of the recognised Financial Planning Institute's (FPI) approved... read more |
| FINANCIAL ADVISORY AND INTERMEDIARY SERVICES ACT |
This Act (37 of 2002) tries to protect the public from financial advisors and those who sell financial/investment products. It substantially increases the accountability and disclosure of financial... read more |
| FINANCIAL DIRECTOR |
One of the directors of a company who is responsible for the company's finances. The Companies Act makes no distinction between the various directors of a company - they all have the same responsibilities... read more |
| FINANCIAL FUTURE |
A futures contract which has as its underlying instrument a financial indicator such as an index or an exchange rate. Clearly, indexes and exchange rates cannot be delivered so 100% of financial... read more |
| FINANCIAL INDEPENDENCE |
Obviously, every private investor's goal is to reach a point of financial independence, where they no longer have to "work for a living", but can live off the return from their investments. The... read more |
| FINANCIAL INSTITUTION |
A financial institution is one which makes its profits by dealing with other people's money. Perhaps the best example is a commercial bank, but there are many other types - like insurance companies... read more |
| FINANCIAL INTELLIGENCE CENTERS ACT |
This Act (38 of 2001) is known as FICA and it came into effect on 1st July 2001. The objective is to combat crimes such as tax evasion and money laudering and it is similar to legislation in... read more |
| FINANCIAL MARKETS ACT |
This Act which came into force in the middle of 2014 brings our legislation into line with international norms. Its objective is to tighten up control over the financial markets and it aligns... read more |
| FINANCIAL MEDIA |
These are newspapers, magazines, talk shows and websites that are devoted to reporting on developments in the financial markets for the benefit of investors and the business community. South... read more |
| FINANCIAL 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 |
| FINANCIAL REPORTING STANDARDS COUNCIL |
The FRSC replaced the Accounting Practices Board in October 2011 as the official body determining accounting standards in South Africa. It is established in terms of the Companies Act (71 of... read more |
| FINANCIAL RESULTS |
Sometimes known as an Annual Report or just the "financial statements", this is a document required by the Companies Act (71 of 2008) to be... read more |
| FINANCIAL SECTOR CONDUCT AUTHORITY |
Previously known as the Financial Services Board (FSB). The Financial Sector Conduct Authority (FSCA), newly named with the advent of the Twin Peaks mechanism, introduced on 1st April 2018, is... read more |
| FINANCIAL SECTOR REGULATION ACT |
Brought into effect on 22 August 2017, the Financial Sector Regulation Act (9 of 2017) introduces the Twin Peak model, which is a new regulatory environment for the banking and financial... read more |
| FINANCIAL SERVICES BOARD |
Previously known as the Financial Services Board (FSB). The Financial Sector Conduct Authority (FSCA), newly named with the advent of the Twin Peaks mechanism, introduced on 1st April 2018, is... read more |
| FINANCIAL SERVICES CHARTER |
The major sectors of the South African economy are governed by sets of rules known as charters which establish... read more |
| FINANCIAL SERVICES PROVIDER |
The Financial Advisory and Intermediary Act provides for the registration of persons (natural or corporate) to give investment advice to investors. The Act requires that such persons are people... read more |
| FINANCIAL STABILITY OVERSIGHT COMMITTEE |
The Financial Stability Oversight Committee consists of the Reserve Bank, the National Treasury and the Financial Services Board established in terms Part 3 of the Financial... read more |
| FINANCIAL STABILITY REVIEW |
A publication produced by the Reserve Bank twice a year with the aim "to identify and analyse potential risks to financial system stability, communicate such assessments, and stimulate debate... read more |
| FINANCIAL TIMES |
This is an English daily financial paper that has become international and which is published digitally. It is owned by the Japanese company, Nikkei which also publishes the Nikkei Asian Review... read more |
| FINANCIAL TIMES INDUSTRIAL INDEX |
A share price index calculated hourly during business hours from an unweighted average of thirty leading blue chips listed on the London Stock Exchange. Until recently this index was the best... read more |
| FINANCIAL TIMES STOCK EXCHANGE |
Financial Times Stock Exchange. This is a company which specializes in calculating indexes on the London Stock Exchange (LSE). It has produced a group of indices which are developed and maintained... read more |
| FINANCIAL TIMES STOCK EXCHANGE 100 INDEX |
A market capitalisation weighted index of the 100 largest companies trading on the London Stock Exchange (LSE). This index is... read more |
| FINANCIAL TIMES STOCK EXCHANGE GROUP PLC |
Financial Times Stock Exchange. This is a company which specializes in calculating indexes on the London Stock Exchange (LSE). It has produced a group of indices which are developed and maintained... read more |
| FINANCIAL YEAR |
In terms of section 27 of the Companies Act (71 of 2008), every company is required to have a financial year-end which is the end of its accounting period. By paying a fee and lodging the prescribed... read more |
| FINANCIAL YEAR |
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 |
| FINANCIAL YEAR-END |
In terms of section 27 of the Companies Act (71 of 2008), every company is required to have a financial year-end which is the end of its accounting period. By paying a fee and lodging the prescribed... read more |
| FINANCIALLY DISTRESSED |
This refers to a company which does not have sufficient short-term cash flow to meet its immediate expenses. When a company is in "financial distress",... read more |
| FINANCIALS |
These are share in the financials sector of the JSE. They are mainly involved in banking, asset management or insurance. Financial... read more |
| FINISHED GOODS |
Products which are ready for sale. Usually a manufacturing company will divide its inventory (stock) into 3 categories - raw materials, work-in-progress and finished... read more |
| FINTECH COMPANY |
A fintech company is one which has developed a financial product which is offered through the internet. The banks are heavily into fintech these days offering insurance products... read more |
| FIRM INTENTION |
This is an offer to buy some or all of the shares of another company which takes the form of an announcement on the Stock Exchange News Service... read more |
| FIRMING MARKET |
A market which is gradually getting stronger - successive highs and lows are higher than previous highs and lows. Firming trends can be short-term lasting for a few days or weeks, a rally which... read more |
| FIRMING TREND |
A market which is gradually getting stronger - successive highs and lows are higher than previous highs and lows. Firming trends can be short-term lasting for a few days or weeks, a rally which... read more |
| FIRST NOTICE DAY |
The first day on which notice of intent to deliver a commodity in fulfilment of an expiring futures contract can be given to the clearinghouse by a seller and assigned by the clearinghouse to... read more |
| FIRST WORLD ECONOMY |
These are the larger and better established economies that have substantial capital bases and a long track record of effective management. Their... read more |
| FIRST-IN-FIRST-OUT |
This is a method of valuing stock which assumes that the oldest stock in the warehouse is used before the more recently purchased stock. Since the price of stock purchased will usually go up... read more |
| FISCAL |
Every government spends money and levies taxes to finance its expenditure. Every government must therefore regularly decide how much to spend, what to spend it on and how to finance its expenditure.... read more |
| FISCAL CLIFF |
A radical reduction in government spending caused by an unforseen event or series of events which increase government debt substantially. America almost experienced a fiscal cliff in January... read more |
| FISCAL CONSOLIDATION |
Concrete policies undertaken by government to stem debt accumulation and reduce the fiscal deficit. This can be achieved by an increase in revenue, or taxation, and a reduction in government... read more |
| FISCAL DRAG |
Bracket creep, also called "fiscal drag" occurs because, with inflation, tax payers are pushed into higher tax brackets each year. In normal circumstances the Minister of Finance... read more |
| FISCAL POLICY |
Every government spends money and levies taxes to finance its expenditure. Every government must therefore regularly decide how much to spend, what to spend it on and how to finance its expenditure.... read more |
| FISCAL STIMULATION |
The government of a country can stimulate its economy in two primary ways - through monetary policy (mostly by reducing the repo rate) of fiscal policy. Fiscal stimulation... read more |
| FISCAL YEAR |
The financial year of the government. In South Africa our fiscal year runs from 1st March until the 28th or 29th of February the following year. Our budgets are made for this fiscal... read more |
| FISCAL DRAG |
Bracket creep, also called "fiscal drag" occurs because, with inflation, tax payers are pushed into higher tax brackets each year. In normal circumstances the Minister of Finance... read more |
| FISCUS |
The National Treasury falls under the Ministry of Finance and is established in terms of section 13 of the Constitution to manage the government's finances. Through the Treasury the country's... read more |
| FITCH |
One of the three internationally recognised rating agencies (along with Standard and Poors and Moodys). Ratings agencies rate governments, companies and para-statals... read more |
| FIX |
The result of a twice-a-day dedicated conference between the 15 members of the London Gold Market Fixing Ltd. Previously this meeting was held at the premises of Nathan Meyer Rothchild &... read more |
| FIXED ASSET |
An asset which is expected to last and be useful for a number of years, and which is held for use in the production or supply of goods or services, for rental to others or for administrative... read more |
| FIXED COSTS |
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 is as opposed to "variable costs" which go up and down... read more |
| FIXED EXCHANGE RATES |
Following the Bretton Woods agreement most currencies (and especially the US dollar) were fixed against gold. President Nixon abandonned Bretton Woods in the early 1970's and after that most... read more |
| FIXED INCOME |
These are investments which give a set return, such as preference shares, bonds, debentures and savings accounts. |
| FIXED INCOME INVESTMENT |
These are investments which give a set return, such as preference shares, bonds, debentures and savings accounts. |
| FIXED INTEREST UNIT TRUST |
A unit trust which only invests in fixed interest investments on the money market, sometimes also called a "fixed interest unit trust". These unit trusts offer much greater security that unit... read more |
| FLAG |
This is a fairly rare charting formation which can occur either in a upward or a downward trend where the market enters a period of uncertainty and moves sideways for a period before the trend... read more |
| FLAG FORMATION |
A charting formation where the price chart forms a pattern which looks something like a triangle. The difference between a pennant and a triangle is the length of time that the formation occurs... read more |
| FLASH FILL |
Order filled immediately by hand signal on an "open outcry" trading floor. |
| FLEDGLING |
Consisting of ordinary shares which comply with all listing requirements, but are too small to be included in the All Share Index and which are not tested for liquidity. There are five JSE indices... read more |
| FLIGHT TO QUALITY |
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 |
| FLIPPING |
The practice of buying shares in a new listing before it comes to the market with the objective of making a profit when trading begins. |
| FLOAT |
(1) The number of shares currently available for trading. (2) As a verb, meaning to list a company on an organised exchange, usually through an initial public offer (IPO) |
| FLOATING |
(1) The number of shares currently available for trading. (2) As a verb, meaning to list a company on an organised exchange, usually through an initial public offer (IPO) |
| FLOOR BROKER |
An individual who executes orders on the trading floor of an "open outcry" exchange for any other person. They are independent members of the various futures exchanges who typically handle customer... read more |
| FLOOR TRADER |
An individual who is a member of an exchange and trades for his own account on the floor of the exchange. |
| FLOW OF FUNDS STATEMENT |
Today, this statement is more commonly called a "Flow of Funds Statement" but is also known as the "Cash Flow Statement". It aims to show where the cash in the business came from and how it was... read more |
| FLYERS |
Speculative or high-risk trades. |
| FMCG |
This is a category of retailers which sell products that have a relatively short sales cycle - like groceries, clothing and small appliances. Typical examples would be Pick 'n Pay, Woolies, Shoprite,... read more |
| FOCUS |
The degree to which a company can concentrate it's energy on its core business. Philip Kotler, the world-renowned management consultant said that the most important question a business can ask... read more |
| FOLLOWING YOUR RIGHTS |
When a company decides to raise additional capital by offering its existing shareholders additional shares in proportion to the number of shares that they already... read more |
| FOMC |
The policy making committee of the Federal Reserve Bank. They meet on a regular basis, every other Monday to make decisions on US economic policy. These meetings are open to the public. Specifically... read more |
| FORCE MAJEURE |
A completely unpredictable event or "black swan" (see "The Black Swan" by Nasssim Talbert) event, usually but not always occurring as a result of some natural... read more |
| FORCE MAJEURE |
In law this refers to an unpredictable event which prevents one party from completing its obligations in terms of a contract. Most major contracts contain a force majeure clause which allows... read more |
| FORECAST ORIGIN |
The most recent historical period for which data is used to build a forecasting model. The next time period is the first forecast period. |
| FORECLOSURE |
A legal option available to a lender who has an asset as collateral which entitles him to sell that asset to recover what is owed to him. In general, foreclosures happen when a person is behind... read more |
| FOREIGN ASSETS |
Assets held outside of a country minus its foreign liabilities. In South Africa, most foreign assets are held by companies which are required to disclose them by law. The value of South Africa'... read more |
| FOREIGN COLLECTIVE INVESTMENT SCHEME |
This is a collective investment scheme which has at least 85% of its investments outside South Africa all the time. Collective investment schemes are controlled by the Collective Investment Schemes... read more |
| FOREIGN CURRENCY |
The foreign exchange (forex) market. This is the cash or "spot" market for foreign currencies. Trade does not occur on centralized contract markets but rather, over-the-counter... read more |
| FOREIGN DIRECT INVESTMENT |
All investment into South Africa by foreigners. FDI is a very important factor in the South African economy. We have some tremendous successes and some dismal failures. The successes... read more |
| FOREIGN EXCHANGE |
The foreign exchange (forex) market. This is the cash or "spot" market for foreign currencies. Trade does not occur on centralized contract markets but rather, over-the-counter... read more |
| FOREIGN EXCHANGE FUTURE |
A contract to exchange one currency for another at a specific future date (the expiration date) and at a specified rate (the exchange rate). More than most derivatives, foreign exchange futures... read more |
| FOREIGN INVESTMENT ALLOWANCE |
A limit on the ammount that South Africans can take out of the country for investment purposes. At the moment that limit is set at R10m per annum in addition to the R1m "discretionary allowance"... read more |
| FOREIGN INVESTOR |
THis refers to any non-South African who brings money into South Africa. The government is at pains to encourage foreing investors into Sotuh Africa to create jobs and stimulate the economy.... read more |
| FOREIGN 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 can be included in the indices, but at a reduced weight.... read more |
| FOREIGN RESERVES |
A reserve of precious metals and foreign currencies kept by the Reserve Bank. |
| FOREX |
The foreign exchange (forex) market. This is the cash or "spot" market for foreign currencies. Trade does not occur on centralized contract markets but rather, over-the-counter... read more |
| FOREX FUTURE |
A contract to exchange one currency for another at a specific future date (the expiration date) and at a specified rate (the exchange rate). More than most derivatives, foreign exchange futures... read more |
| FORMAL BUSINESSES |
That part of the economy that operates within the country's laws. It complies with all the laws on income tax, licencing, reporting and other regulations. This is as opposed to the informal sector... read more |
| FORMAL SECTOR |
That part of the economy that operates within the country's laws. It complies with all the laws on income tax, licencing, reporting and other regulations. This is as opposed to the informal sector... read more |
| FORMATION |
The discipline of "technical analysis" or "charting", as it is sometimes called, consists of studying chart patterns with a view to establishing patterns that can be used... read more |
| FORMATION ANALYSIS |
The study of technical analysis can be divided into three primary areas - Formation Analysis, Line charts and Wave and Cycle Theories. Formation analysis is the study of the various patterns... read more |
| FORWARD (CASH) CONTRACT |
A contract which requires a seller to agree to deliver a specified cash commodity to a buyer sometime in the future. All terms of the contract are customised, in contrast to futures contracts... read more |
| FORWARD BOOK |
This is the state of the Reserve Bank's forward book in the foreign currency market. In the past, the Reserve Bank ran a substantial deficit on the forward book which reached as much as US$25bn... read more |
| FORWARD BOOK |
An account in the derivatives market that the Reserve Bank maintains to execute transactions in the currency market. There is always a temptation for the Reserve Bank to try to protect the rand... read more |
| FOUNDING DATE |
The date on which a company was founded. You should bear in mind that this date is often long before the date that the company was listed on the JSE. Your stock exchange handbook gives the year... read more |
| FOUR PRICE DOJI |
A candlestick where all four prices, high, low, close and open are all the same for one trading day. On a well-traded share this would be a very rare occurrence. With a thinly traded share, if... read more |
| FRAMING OR FRAME DEPENDENCE |
Behavioural finance. The tendency to evaluate current decisions within the framework in which they have been presented. Making decisions based on perceptions of risk/return rather than pure risk... read more |
| FRAUD ON THE MINORITY |
An old concept which has been replaced in the Companies Act (71 of 2008) in sections 163/4 with the concept of a dissenting shareholder and their appraisal rights. Basically, if a shareholder... read more |
| FREE CARRY |
This is a percentage of a company's equity and profits that is not paid for. This is typically enforced by law in favour of the government on a business, usually a mining company, for the exploitation... read more |
| FREE CASH FLOW |
The cash generated by a company from its sales (revenue) less its operating expenses and any capital expenditure that it may have to make. Free cash flow is used to determine the company's cash... read more |
| FREE DEALING |
A term used to describe listed shares which trade in large volumes regularly and can be bought or sold freely on the Securities Exchange. You should be careful of shares which are "tightly held"... read more |
| FREE FLOAT |
The proportion of a company's shares which are held by the public at large. This excludes shares which are part of a lock-in or which are destined for the company's employee share option scheme.... read more |
| FREE MARKET |
This refers to a market which is free from interference or control by government. In such markets prices are determined by the interaction of supply and demand. Transactions... read more |
| FREE TRADE |
This refers to a market which is free from interference or control by government. In such markets prices are determined by the interaction of supply and demand. Transactions... read more |
| FREE-FLOAT 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 market capitalisation. This is used in the construction... read more |
| FRIEDMAN MILTON |
Friedman was a Nobel prize winning American economist who developed the economic school of thought known as "monetarism". This school rejected the Keynesian approach in the mid-1970s. The major... read more |
| FRONT END DEBT-TO-INCOME RATIO |
A ratio which measures how much of a person's gross monthly income is allocated to their cost of housing. Their cost of housing is either rent or mortgage repayments. The banks that provide mortgage... read more |
| FRONT END RATIO |
A ratio which measures how much of a person's gross monthly income is allocated to their cost of housing. Their cost of housing is either rent or mortgage repayments. The banks that provide mortgage... read more |
| FRONT MONTH |
The first expiration month in a series of expiration months. Futures contracts typically expire at the end of March, June, September and December. |
| FRONT-LOADED |
Commission and fees taken out of investment capital by an asset manager before the balance of the money is put to work. |
| FRONT-RUNNING |
The practice of trading ahead of large orders to take advantage of favourable price movements. Brokers are prohibited from this practice. |
| FRONTING |
In terms section 1 of the Broad Based Black Economic Empowerment Act (53 of 2003), fronting is any activity which undermines the Act. In effect this means trying to appear compliant with the... read more |
| FRSC |
The FRSC replaced the Accounting Practices Board in October 2011 as the official body determining accounting standards in South Africa. It is established in terms of the Companies Act (71 of... read more |
| FRYING PAN BOTTOM |
This is the name that technicians give to the bottom formation of a share price where it drifts out slowly from a strong downward trend and then begins to tentatively... read more |
| FRYING PAN 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 |
| FSCA |
Previously known as the Financial Services Board (FSB). The Financial Sector Conduct Authority (FSCA), newly named with the advent of the Twin Peaks mechanism, introduced on 1st April 2018, is... read more |
| FSP |
The Financial Advisory and Intermediary Act provides for the registration of persons (natural or corporate) to give investment advice to investors. The Act requires that such persons are people... read more |
| FT |
This is an English daily financial paper that has become international and which is published digitally. It is owned by the Japanese company, Nikkei which also publishes the Nikkei Asian Review... read more |
| FTSE |
Financial Times Stock Exchange. This is a company which specializes in calculating indexes on the London Stock Exchange (LSE). It has produced a group of indices which are developed and maintained... read more |
| FTSE/JSE INDEXES |
The indexes are produced as a joint venture between the FTSE group and the JSE. These indexes are mostly in your software and have short codes beginning with "J" such as the FTSE/JSE Overall... read more |
| FTSE100 |
A market capitalisation weighted index of the 100 largest companies trading on the London Stock Exchange (LSE). This index is... read more |
| FULL EMPLOYMENT |
Full employment is defined by the International Labour Organisation as the level of employment where all those available and actively seeking work are able to obtain a job. In a fully employed... read more |
| FULL SERVICE BROKER |
A stockbroking firm that mainatins a research department that does research on behalf of its clients and then charges higher brokerage fees. With the advent of online broking, discount brokers... read more |
| FULLY DILUTED |
A per share ratio which uses the number of issued shares at the end of the accounting period. Typically a listed company will issue additional shares during the year for a variety of reasons.... read more |
| FULLY DISCOUNTED |
When an event which impacts on the profitability of a listed company is fully reflected in its share price, we say that is has been fully discounted. Events which impact the profitability of... read more |
| FULLY PRICED |
Fully priced is when the potential of a share to produce future dividends is fully discounted into its price. This means that there... read more |
| FUND MANAGER |
The JSE is dominated by institutional investors which account for as much as 90% of all trades. These institutions are pension funds, insurance... read more |
| FUND OF FUNDS |
This is a fund manager or unit trust which invests in other funds rather than investing directly into shares, bonds or other primary investments. Fund of funds unit trusts are collective investment... read more |
| FUND OF FUNDS UNIT TRUST |
This is a fund manager or unit trust which invests in other funds rather than investing directly into shares, bonds or other primary investments. Fund of funds unit trusts are collective investment... read more |
| FUNDAMENTAL ANALYSIS |
The study of all factors which will impact the profitability of a company. Typically, the fundamental analyst is asking the question, "How good will this company be as a generator of dividends... read more |
| FUNDAMENTAL RISK |
This is the risk which is inherent in a particular company. It can be assessed by considering the company's financials or visiting it. The more you know about a company and the people who run... read more |
| FUNDAMENTAL TRANSACTION |
A transaction undertaken by a company which involves: (1) the sale of all or a large part of the assets of the company (2) a scheme of arrangement, or (3) an amalgamation or merger. The Companies... read more |
| FUNDAMENTALIST |
A person who uses fundamental analysis, (rather than technical analysis) to select shares and time their transactions in the stock market. Fundamentalists are concerned with... read more |
| FUNDAMENTALS |
All those factors which will tend to influence the future profits of a company. The most important of these is its past profitability - which is best discovered by a careful... read more |
| FUNDING AGENCY |
An organisation established and funded by the government that provides funds to businesses which are furthering government's objectives. There are many such organisations. For example: (1) the... read more |
| FUNGIBILTY |
The tradability of an asset, usually on an organised exchange. The ability to easily sell an asset can have a significant impact on its value. For example, the shares of companies listed on the... read more |
| FUNGIBLE |
Fungible instruments are securities which can be easily traded because they are homogenous (i.e. all the same). Organised exchanges deal in and guarantee trades in fungible instruments. Instruments... read more |
| FUNGIBLE INSTRUMENT |
Fungible instruments are securities which can be easily traded because they are homogenous (i.e. all the same). Organised exchanges deal in and guarantee trades in fungible instruments. Instruments... read more |
| FUTURE VOLATILITY |
A prediction of what volatility may be like in the future. The volatility of a share's price is determined by the degree to which it departs from its average. Obviously a straight line is the... read more |
| FUTURES CONTRACT |
A legally binding, standardised agreement to buy or sell a commodity or financial instrument at a future date. Futures contracts are standardised according to the quality, quantity and delivery... read more |
| FUTURES INDUSTRY ASSOCIATION |
The US national trade association for Futures Commission Merchants. The FIA is the only association representative of all organisations that have an interest in the futures market in the US.... read more |
| G20 |
A group of 19 countries and the European Union which replaced the G7 and includes the larger emerging economies such as China and South Africa. Its objectives include promoting growth of the... read more |
| G30 |
An international group 24 of academics, financial leaders and econimists that aims to imporve the world economy through a better understanding of economic impacts and decisions. It also has 16... read more |
| G7 |
This was a group of 7 countries - America, Canada, United Kingdom, France, Germany, Italy and Japan. It was established in in 1975 and was formed from the "Group... read more |
| GAAP |
Section 19 of the Financial Advisory and Intermediary Services Act (FAIS) requires that "the financial statements be prepared in conformity with generally accepted accounting practice". The auditor... read more |
| GAMMA |
The degree by which the delta changes with respect to changes in the underlying instrument's price. |
| GANN THEORY |
Various analytical techniques developed by legendary trader W.D. Gann. His first prophecy is believed to have happened during World War I when he predicted the Nov 9, 1918, abdication of the... read more |
| GANN WILLIAM |
An American trader of securities who developed a complex system of charts using astrology, geometry and archaic maths. He died in 1955, but left a substantial following who still use his methods... read more |
| GANN'S SQUARE OF 9 |
A trading tool that relates numbers, such as a stock price, to degrees on a circle. The Square of 9 is basically a spiral of numbers. The initial value can be found in the centre of the spiral.... read more |
| GAP |
A day in which the daily range is completely above or below the previous day's daily range. This term normally refers to a bar chart where the low for one day is considerably above the high for... read more |
| GARNISHEE |
A court order which obliges an employer to deduct money from an employee's salary or wage for payment to a creditor. In South Africa a garnishee order cannot be more than 25% of the employee's... read more |
| GAS |
Natural gas is a clean burning hydrocarbon, producing far less carbon dioxide and air pollutants compared to coal, when used to generate electricity. It is abundant, there are estimated... read more |
| GAUSSIAN |
A Chinese actuary and quatitative analyst who is best known for his application of gaussian copulas for securitised mortgage bonds leading to the "sub-prime" crisis of 2007/8. Li's formulae justified... read more |
| GAZETTE |
A web site where the government publishes all official notices. Certain legal notices must also be published on this site to be legally binding. |
| GCI |
The global competitiveness index (GCI) is prepared by the World Economic Forum (WEF) annually and it ranks 141 countries on how competitive they are. To do this it uses 12 areas which indicate... read more |
| GDI |
An economics concept which is the total income created by the production of final goods and services within the economy. |
| GDP |
The GDP of a country is defined as the market value of all final goods and services produced within a country in a given period of time. It... read more |
| GEARING |
The relationship of a company's borrowings or debt to ordinary shareholders' funds. The American term for gearing is "leverage". A company can obtain the finance it needs... read more |
| GEMSTONE |
A cut and polished semi-precious stone used in the making of jewellery. Gemstones can include amber, and pearls which are not stones but organic in origin. On the JSE, the company Gemfields... read more |
| GENERAL EQUITY UNIT TRUST |
A unit trust which focuse on listed shares - as opposed to fixed interest investments or other types of investments. The performance of these funds can be expected to be more-or-less in line... read more |
| GENERAL FUEL LEVY |
A general tax changed per litre of petrol sold. This tax is administered by the National Treasury, and despite most people thinking it is used to maintain the roads, it is a general tax included... read more |
| GENERAL MEETING |
This is a meeting of the shareholders of a company, which is required in terms of section 61 of the Companies Act (71 of 2008). The AGM must... read more |
| GENERAL MINING |
The extraction and exploitation of metals and minerals from the ground. This activity in South Africa is controlled by the Mineral and Petroleum Resource... read more |
| GENERAL OFFER |
An offer made to all shareholders of a company for the purchase of their shares. The purchase price could be in cash or in shares of a predator company or a combination of both. |
| GENERALLY ACCEPTED ACCOUNTING PRACTICE |
Section 19 of the Financial Advisory and Intermediary Services Act (FAIS) requires that "the financial statements be prepared in conformity with generally accepted accounting practice". The auditor... read more |
| GENERIC SCORECARD |
In terms of the BBBEE (Braod Based Black Economic Empowerment) Act, companies over a certain size are required to maintain a scorecard in which black ownership, black management, black employment... read more |
| GEPF |
A pension fund for government employees, the GEPF is the single largest investor on the JSE owning about 12,5% of its market capitalisation and with about R1,8 trillion rand invested. The GEPF... read more |
| GIC |
A single lump-sum deposit that earns a guaranteed interest until a known maturity date. GICs are issued by insurance companies. |
| GILT |
Any fixed interest security which has very low risk and relatively low return. Government bonds are considered to be gilts, and especially US Treasury bills. The originally only applied to government... read more |
| GIVE-UP |
When a broker executes an order for another broker's client and the two brokers split the commission; the client pays nothing extra. |
| GLASS STEAGAL |
These are four provisions of the US Banking Act which were sponsored by Senator Glass and Representative Steagall. These provisions separated commercial banking from other financial activities,... read more |
| GLOBAL COMPETITIVENESS INDEX |
The global competitiveness index (GCI) is prepared by the World Economic Forum (WEF) annually and it ranks 141 countries on how competitive they are. To do this it uses 12 areas which indicate... read more |
| GLOBAL DOW |
An index created and maintained by the Dow Jones company which tracks the average movement of 150 blue chip shares from around the world. The objective is to track the performance of all world... read more |
| GLOBAL ECONOMIC SYSTEM |
The combined economies of all the countries of the world also called the global economic system. It is important for the private investor... read more |
| GLOBAL INFLATION |
This is the average inflation rate of the world tracked by the International Monetary Fund (IMF). The global inflation rate has been falling since the 1980's primarily because central banks,... read more |
| GLOBE TRADE CENTRE S.A |
21 - 08 - 2020 GTC is a property group operating in central and Eastern Europe. The company has properties in Poland, Bucharest, Budapest, Belgrade, Sophia and Zagreb. It manages 46 buildings... read more |
| GLOBEX |
The Chicago Mercantile Exchange's electronic trading platform. Some futures contracts are available for trading on Globex only during the U.S. evening hours, while others -- such as the very... read more |
| GOING CONCERN |
A profitable business which is expected to be able to continue in business because it has sufficient cash-flow to meet its commitments. |
| GOING PUBLIC |
A term used to describe the sale of shares of a privately-held company to the public for the first time. |
| GOING SHORT |
A sale of shares before they are purchased. A bear sale (or short sale) is the sale of an undertaking to supply a certain number of shares at a specified date in the future.... read more |
| GOLD |
A precious metal that has been known and kept for thousands of years as a currency and a way to store value. All the gold ever mined throughout history... read more |
| GOLD FIX |
The result of a twice-a-day dedicated conference between the 15 members of the London Gold Market Fixing Ltd. Previously this meeting was held at the premises of Nathan Meyer Rothchild &... read more |
| GOLD SHARES |
South Africa has traditionally been a gold-producing country and gold shares used to make a large proportion of the JSE, but today, the gold industry has shrunk substantially and gold shares... read more |
| GOLD STANDARD |
A past financial discipline whereby a country's currency was directly linked to that country's gold reserves. Form 1989 until 1933 America was on the gold standard which acted as a limitation... read more |
| GOLDEN MEAN |
The ratio of any two consecutive numbers in the Fibonacci sequence, known as phi and equal to 0.618; a proportion that is an important phenomenon in music, art, architecture and biology. The... read more |
| GOLDEN RATIO |
The ratio of any two consecutive numbers in the Fibonacci sequence, known as phi and equal to 0.618; a proportion that is an important phenomenon in music, art, architecture and biology. The... read more |
| GOLDEN SECTION |
Any length divided so that the ratio of the smaller to the larger part is equivalent to the ratio between the larger part and the whole and is always 0.618. See also the Fibonacci Sequence. |
| GOOD |
An economic term meaning a product with value. Economists talk about the "goods" and services in the economy. A good can be anything from a raw material to a finished... read more |
| GOOD THRU DATE |
Good Thru Date order. This order works until executed or cancelled, or until the end of the trading session on the date specified by the trader. |
| GOOD TILL CANCELLED |
Good Till Cancelled order. This order works until executed or cancelled, unlike a Day order, which, if not filled, expires automatically at the end of the trading session on the day it was entered.... read more |
| GOODWILL |
An intangible asset which arises when a holding company pays more for a subsidiary than its book value. Goodwill is also called a "premium arising on acquisition" and is normally written off... read more |
| GOVERNMENT BONDS |
Instruments for short-term borrowing employed by governments. The bills are issued by tender to the money market. Usually, when economists refer... read more |
| GOVERNMENT BORROWING |
This is the difference between government revenue and expenditure. Typically, governments spend more than they receive from taxes and other types... read more |
| GOVERNMENT DEBT |
This is the difference between government revenue and expenditure. Typically, governments spend more than they receive from taxes and other types... read more |
| GOVERNMENT EMPLOYEES PENSION FUND |
A pension fund for government employees, the GEPF is the single largest investor on the JSE owning about 12,5% of its market capitalisation and with about R1,8 trillion rand invested. The GEPF... read more |
| GOVERNMENT GUARANTEED DEBT |
The government is constantly trying to balance the books. This means that they are always looking for additional sources of money to accommodate competing needs. To do this they have a number... read more |
| GOVERNMENT INSTITUTIONS |
State Owed Enterprises (SOE) are corporations owned and controlled by the government. In South Africa there are about 200 SOE's which deal with everything... read more |
| GRADE |
The number of grams per ton of ore milled, usually in a gold mine or other precious metals mine. Mines are categorised by their average grade and it is a key component of their results. Low grade... read more |
| GRAHAM BENJAMIN |
Benjamin Graham is the author of "Security Analysis" and "The Intelligent Investor", two books which Warren Buffett said had a great influence over his approach to share market investing. Graham... read more |
| GRAMM RUDMAN |
An American Act, "The Balanced and Emergency Budget Deficit Control Act" was designed to bring the American budget into balance by 1991 or a series of budget cuts would come into effect. The... read more |
| GRAND SUPER CYCLE |
First proposed by Russian economist Nicolai Kondratiev in his 1926 book, a very long cycle of around 54 years in commodity prices was identified. This was subsequently re-iterated by R. N. Elliott... read more |
| GRANTOR |
A person who sells an option and assumes the obligation to sell (in the case of a call) or buy (in the case of a put) the underlying futures contract at the exercise price. Also referred to as... read more |
| GRANVILLE JOSEPH |
A financial public speaker and writer from America, Joseph Granville championed the the idea of using volumes as a key technical indicator. He developed the On Balance Volume technique (OBV)... read more |
| GRAPH |
In the context of the share market, this is a display or picture of a security that plots price and/or volume (the number of shares... read more |
| GRAVESTONE DOJI |
A candlestick pattern with a long upper shadow and where the open and close for the day occur at the low for the day. This candlestick pattern signifies uncertainty in the market and can signify... read more |
| GREEN BONDS |
A debt instrument with a fixed coupon where the money raised is used for climate and environmental projects. Green bonds can be listed on the JSE provided they comply with the listing requirements... read more |
| GREEN CHIP |
Environmentally friendly companies which are usually in the JSE's Socially Responsible Index. |
| GREEN ENGULFING PATTERN |
A bottom candlestick reversal signal, this is a two candlestick pattern consisting of a large green candle enveloping a preceding red candle. This pattern implies that the trend... read more |
| GREEN FIELDS OPERATIONS |
A business activity, usually in the mining industry, which is a completely new start-up. This is a high-risk, potentially high return undertaking compared to a "brownfields" operation where an... read more |
| GREEN TAX |
A tax introduced by President Cyril Ramaphosa from 1st June 2020 in terms of the Carbon Tax Act (15 of 2019). In terms of this Act, companies will be taxed... read more |
| GREENHOUSE GAS EMISSIONS |
Those gaseous emissions which contribute to global warming and climate change by trapping solar energy inside the atmosphere. The burning of fossil fuels is the main contributor to these emissions.... read more |
| GREENSPAN ALAN |
The Chairman of the Federal Reserve Bank of America (Fed) from 1987 to 2006. Alan Greenspan is notable because he ushered in the idea of stimulating... read more |
| GROSS DOMESTIC EXPENDITURE |
This is an economics term which refers to the total expenditure within the economy. It is a method of calculating gross domestic product. The formula is: Gross Domestic Product = Consumer... read more |
| GROSS DOMESTIC INCOME |
An economics concept which is the total income created by the production of final goods and services within the economy. |
| GROSS DOMESTIC PRODUCT |
The GDP of a country is defined as the market value of all final goods and services produced within a country in a given period of time. It... read more |
| GROSS FIXED CAPITAL FORMATION |
The net increase in fixed capital in the economy, usually over the fiscal year. Basically this includes all new assets in the economy plus improvements to existing assets. So this is everything... read more |
| GROSS LETTABLE AREA |
The area which a property company has available for rent. Real estate investment trusts (REIT) and property companies typically quote this statistic with the interim results... read more |
| GROSS NATIONAL PRODUCT |
Gross National Product or GNP is the value of all final goods and services produced within the economy during a specified period. It usually includes all domestic consumption expenditure, domestic... read more |
| GROSS PROFIT |
A company's profit after its direct or variable costs have been deducted. Typically, the gross profit is the final figure in the company's trading account which begins... read more |
| GROSS SALES |
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 |
| GROUP |
The holding company of a number of subsidiaries. Such companies produce group consolidated accounts once per annum, showing the consolidated position and performance of the holding company and... read more |
| GROUP FINANCIAL STATEMENTS |
In terms of section 30 of the Companies Act, a company is obliged to produce group consolidated financial statements in such a way that inter-company loans are eliminated, the minority or outsider... read more |
| GROUP INVESTOR BEHAVIOUR |
The behaviour of investors as a group. Group investor behaviour creates observable patterns in share prices, indexes and other financial information. This is the basis for technical analysis.... read more |
| GROUP OF THIRTY |
An international group 24 of academics, financial leaders and econimists that aims to imporve the world economy through a better understanding of economic impacts and decisions. It also has 16... read more |
| GROWTH |
In the context of economics, this refers to the increase in a country's gross domestic product (GDP). GDP growth is impacted by many things, but mainly... read more |
| GROWTH FUND |
A more speculative mutual fund made up primarily of the growth or performance stocks that are expected to appreciate in price more than the broad market over an extended time period. |
| GROWTH SHARES |
A growth share is a share in a listed company which is expected to grow rapidly. This term is normally applied to companies which have recently listed on the JSE,... read more |
| GTC |
21 - 08 - 2020 GTC is a property group operating in central and Eastern Europe. The company has properties in Poland, Bucharest, Budapest, Belgrade, Sophia and Zagreb. It manages 46 buildings... read more |
| GTC |
Good Till Cancelled order. This order works until executed or cancelled, unlike a Day order, which, if not filled, expires automatically at the end of the trading session on the day it was entered.... read more |
| GTD |
Good Thru Date order. This order works until executed or cancelled, or until the end of the trading session on the date specified by the trader. |
| GUARANTEE FUND |
A fund which is built and sustained by the stock exchange to cover any counter party risks which may exist in securities trading. For example, the risk that a stockbroking firm... read more |
| GUARANTEED INVESTMENT CONTRACTS |
A single lump-sum deposit that earns a guaranteed interest until a known maturity date. GICs are issued by insurance companies. |
| GURU |
A person who is thought to be an expert on predicting the future course of the market. At any point in time there are always experts who are called upon to predict the future of the stock market.... read more |
| HAMMER FORMATION |
A bullish reversal candlestick pattern implying that an upward trend is likely to begin. The hammer consists of a candle which... read more |
| HANDBOOK |
A regurlarly updated hard-copy book which gives details of all the listed companies on the JSE. This book is updated three times a year and contains abbreviated financials going back five years... read more |
| HANG SENG |
An index of the 50 largest companies trading on the Honk Kong Stock Exchange. The companies represent about 60% of the market capitalisation of the market. The index is weighted for the free-float... read more |
| HANGING MAN |
A top reversal candlestick formation which signals the end of an upward trend, consisting of a candle with a small body and long lower shadow. This formation implies that the bulls are losing... read more |
| HARAMI |
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 of it's preceding candle. Harami means pregnant... read more |
| HARAMI CROSS |
A top or bottom candlestick reversal pattern, very similar to the harami, comprising of two candles, one situated within the body of the other. The first candle has a large body. The second candle... read more |
| HARD ASSET |
A commodity such as a metal or mineral. Most paper assets reflect some sort of claim to or against a hard asset, either directly or indirectly. The ultimate hard asset is gold, but all hard assets... read more |
| HARD COMMODITY |
Hard commodities are mostly the product of mining - base metals and minerals as well as precious metals. This is as opposed to soft commodities which are the product of agriculture - such as... read more |
| HARD CURRENCY |
A first-world currency which is relatively stable and serves as a good store of value. The hard currencies of the world include the US dollar, the euro,... read more |
| HARMFUL TAX PRACTICES |
A harmful tax practice occurs when a country offers a lower than normal tax rate and other tax incentives which attract investment at the expense of other countries. The OECD created a forum... read more |
| HAULAGE |
In underground mining a large diameter tunnel which connects the central vertical shaft to the mine's working area. The working area is usually accessed by "stopes" which lead off the haulage... read more |
| HAWK |
An individual on the Monetary Policy Committee (MPC) who is against reducing interest rates to stimulate the economy - the opposite of a "dove". The Central Bank... read more |
| HDSA |
The laws of South Africa are based on the constitutional requirement to remedy the imbalances of the past by benefiting historically disadvantaged South Africans. This generally means that the... read more |
| HEAD AND SHOULDERS FORMATION |
A charting formation at the top of a cycle. The price chart forms three peaks the middle one of which is the highest. The "left shoulder" is generally... read more |
| HEADLINE EARNINGS |
The earnings of a company which are directly associated with its continuing operational activities. Profits or losses from discontinued operations are excluded... read more |
| HEADLINE EARNINGS PER SHARE |
The earnings of a company derived from its normal core business divided by the company's average number of shares in issue during... read more |
| HEADLINE INDEXES |
The JSE has seven headline indexes - they are the All Share Index (J203), the Top 40 index (J200), the Large cap index (J205), the Large and mid cap index (J206), the Mid-cap index (J201), the... read more |
| HEADROOM |
This is the amount of financial space that a company has in terms of surplus available funds. Most companies have cash assets as well as pre-arranged financial facilities which are available... read more |
| HEAP LEACHING |
A method of extracting, particularly gold, from mined ore. The ore is crushed and heaped on a waterproof surfacethat the leaching solution can be applied to. The solution dissolves the gold.... read more |
| HEAVILY TRADED |
A share which has significant volume traded every trading day. The opposite of thinly traded. We recommend that as a private investor you only consider shares which trade at least three times... read more |
| HEAVYWEIGHT |
A large blue chip share which has a long history of growth and generating profits. This type of share is also sometimes called a "blue chip" or an institutional stock (because the big institutions... read more |
| HEDGE |
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 |
| HEDGE AGAINST INFLATION |
Any tangible or hard asset which can be used to protect the investor against depreciation in the value of paper currencies. Gold and other precious metals are typically the most popular hedges... read more |
| HEDGE BOOK |
Mining companies often have a portfolio of hedges for the commodity that they deal in. A hedge enables them to lock in the current price of their commodity and so protects them against a fall... read more |
| HEDGE FUND |
A mutual fund involving speculative investing in stocks and options. |
| HEPS |
The earnings of a company derived from its normal core business divided by the company's average number of shares in issue during... read more |
| HERFINDAHL HIRSHMAN INDEX |
(HHI) A formula for calculating market concentration. The index is calculated by adding together the squares of the companies' percentage market shares. The highest reading would be at or close... read more |
| HERIOT REIT LIMITED |
01 - 10 - 2020 Heriot (HET) is a real estate investment trust (REIT) which owns a diverse portfolio of 43 properties worth R4,47bn in retail, industrial, commercial and specialist property.... read more |
| HERRICK PAYOFF INDEX |
An index requiring two inputs, one of which is a smoothing factor known as the multiplying factor and the other of which is the value of a one-cent move. |
| HEURISTIC METHOD |
Problem solving approached by trying out several different methods and comparing which provides the best solution. |
| HFT |
High frequency trading (HFT) consists of making large numbers of trades through a very fast computer that is connected directly to the stock exchange. These are program trades which are designed... read more |
| HIGH |
The highest point in a price pattern over a specific period. For example, each day each listed share which is traded makes a "high"... read more |
| HIGH FREQUENCY TRADING |
High frequency trading (HFT) consists of making large numbers of trades through a very fast computer that is connected directly to the stock exchange. These are program trades which are designed... read more |
| HIGH QUALITY |
A term used to describe a share which is highly rated by investors. High quality shares are usually large companies which have a long... read more |
| HIGH-TICKING |
To pay the offered price. |
| HIGHLY 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, but the big institutions (like pension funds, unit... read more |
| HIGHLY LIQUID |
A term to describe a share which has a large number of shares changing hands each trading day. A good example is Sasol which has an average of 1,3 million shares at roughly R500 each trading... read more |
| HIGHLY RATED |
This term describes the share of a company with a reputation for consistently growing its earnings. The rating of a company is dependent on the consistency with which it can grow headline earnings... read more |
| HISTORIC VOLATILITY |
How much a contract price has fluctuated over a period of time in the past; usually calculated by taking a standard deviation of price changes over a time period. |
| HISTORICAL COST |
The original cost of an asset when it was first purchased, less depreciation to date, unless revalued. This is a conservative approach to financial accounting. Some assets like land can appreciate,... read more |
| HISTORICAL DATA |
A series of past daily, weekly or monthly market prices (open, high, low, close, volume, open interest). |
| HISTORICALLY DISADVANTAGED SOUTH AFRICAN |
The laws of South Africa are based on the constitutional requirement to remedy the imbalances of the past by benefiting historically disadvantaged South Africans. This generally means that the... read more |
| HOLDER |
The purchaser of either a call or put option. Option buyers receive the right, but not the obligation, to assume a futures position. The opposite of a Grantor. Also referred to as the Option... read more |
| HOLDING COMPANY |
Any company which owns more than 50% of the voting capital of another company, or can be said to have effective control over the appointment of its directors. |
| HOMOGENOUS SECURITY |
Homogeneity means "sameness". In the investment world it refers to the fact that every ordinary share of Sasol or any listed company is exactly the same as every other ordinary share - which... read more |
| HOOK DAY |
A trading day in which the open is above/below the previous day's high/low and the close is below/above the previous day's close with narrow range. |
| HORIZONTAL COUNT |
A part of Point & Figure charting (P&F) used to calculate share's (or other indicator) upside target after an extended sideways market and a upside breakout. Essentially, the longer that... read more |
| HOSTILE TAKEOVER |
A takeover which is opposed by the board of directors. The acquiring company approaches the shareholder directly despite the fact that the directors oppose the takeover. The only grounds on which... read more |
| HOUSEHOLD |
In economics, the household is the basic unit of consumer spending and production. Households often own and supply labour and entrepreneurial ability to businesses. Through their savings they... read more |
| HURDLE RATE |
This is the required return on investment for an international investor who is considering investing into this country (or another country). The hurdle rate increases as the perceived political... read more |
| HYBRID INSTRUMENT |
An investment instrument which has some characteristics of debt and some of equity. For example, convertible debentures, which are convertible into equity... read more |
| HYBRID SECURITY |
A security which incorporates both equity and fixed interest elements. A good example is a convertible debenture which converts to equity on a fixed date. As it approaches that conversion date... read more |
| HYPERINFLATION |
Rapid and excessive inflation within an economy. Where normal inflation is measured over... read more |
| IASB |
In March 2001, the International Accounting Standards Committee (IASC) Foundation was formed as a not-for-profit corporation incorporated in the State of Delaware, US. The IASC Foundation is... read more |
| ICB |
A classification system for industries launched by Dow Jones in 2005 and which has gained inetrnational acceptance. The system has 11 industries broken down into 20 super-sectors, 45 sectors... 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 policies as laid out in the various... 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 to invest in health, education... read more |
| IDX |
International derivatives exchange allows investors to invest in single stock futures in internationally listed blue chip companies. Contracts are settled in rands and traders do not require... 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 in order to encourage growth... 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 called the International Financial... 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 ensure that banks and other financial institutions... 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 many disused mines where the shafts... 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. In South Africa, however, such strikes... 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, but the big institutions (like pension funds, unit... 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 a bad corporate image usually... read more |
| IMF |
An organisation with over 185 member countries that aims to maintain international currency stability and maximise economic growth. The IMF regularly reports on world growth and economic developments.... 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 stock 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 price of an option rises without a change in the... 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 raw materials and imports... 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 ratio would be around 15 to 20 and South Africa... read more |
| IMPULSE WAVE |
A wave or cycle of waves that carries the current trend further in the same direction. |
| IN PLAY |
A stock 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 futures contract. A put option is in-the-money if its strike... 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 liabilities from its assets... 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 66% while for individuals it is 40%. Thus, if you are in the... 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 securities after deduction of operating expenses. |
| INCOME STATEMENT |
A requirement of the Companies Act and Generally Accepted Accounting Practice (GAAP), the income statement must disclose the turnover of the company during the accounting period and certain,... 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, to provide for the recovery of taxes... 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 must register a Memorandum of... 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 of association. The new Companies Act which... 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 behalf of a smaller company. In order to reduce costs... 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 to invest in health, education... read more |
| INDEPENDENT POWER PRODUCER |
An independent power producer (IPP) is a private organisation that produces power, usually from renewable sources which is then sold to Escom on contract. With the advances in particularly solar... 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 financial sector. Its objective... 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 only to smaller companies... 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. This is part of the government's plan to... 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 specific index - usually on the JSE.... read more |
| INDEX POINTS |
A measurement term for market indices. An index is an aggregate of the listed companies on an exchange, for example, the JSE Top 40 is an average of the top 40 companies trading on the JSE by... 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 is as opposed to "variable costs" which go up and down... 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 is as opposed to "variable costs" which go up and down... 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 policies as laid out in the various... 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 in order to encourage growth... 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, the plan aims to stimulate growth in... 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 inetrnational acceptance. The system has 11 industries broken down into 20 super-sectors, 45 sectors... 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 information which affects the profitability... read more |
| INELASTIC |
A microeconomics terms which indicates that the demand or supply for a particular good or serive is not reponsive to changes in price. In a supply and demand graph showing price on the Y-axis,... 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 which is the CPI without... 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 which is the CPI without... 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 estimated that about three quarters of... 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 is similar to the Stock Exchange... 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 or municipality. The provision... 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 |
Usually coinciding with a listing, this is the first offer of shares to the investing public by a company. |
| 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 Fund (IMF) to help it manage the COVID-19... 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 something and VAT is charged on that... 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 of it's preceding candle. Harami means pregnant... 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 trading in the security. It was repealed... 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 obtain further credit. In law a person... 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 institutional investors on the JSE. In South Africa there... read more |
| INSTRUMENT |
A very generalised term for any sort of security or debt claim. Thus instruments can include shares, debentures, bonds, derivative contracts and so on. |
| 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 of insurance business in the Republic... 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 natural and juristic, against... 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, but refer to the company's rights to something or the... 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, but refer to the company's rights to something or the... read more |
| INTEGRATED REPORT |
The King 3 report on corporate governance requires that companies produce an integrated report which includes a "sustainability report". Listed companies are required by the JSE Rules to adhere... 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 to be updated every 2 years, but... 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. Intellectual property is the subject... 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 creditworthiness of the counterparties, such... 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 a period of time. Interest rates... 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 is interest-free and usually the money owed to a company's... 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 should be sufficient to cover its interest bill at least 3 times. The... 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 requires one side to pay a fixed rate... read more |
| INTERIM DIVIDEND |
... 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 sometimes called "semi-finished goods". The demand... 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 what amount of money received in a year's... 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 Delaware, US. The IASC Foundation is... read more |
| INTERNATIONAL DERIVATIVES EXCHANGE |
International derivatives exchange allows investors to invest in single stock futures in internationally listed blue chip companies. Contracts are settled in rands and traders do not require... read more |
| INTERNATIONAL FINANCAIL 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 ensure that banks and other financial institutions... 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 called the International Financial... 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 reports on world growth and economic developments.... read more |
| INTERNATIONAL SECURITIES IDENTIFICATION NUMBER |
... read more |
| INTERNATIONAL TRADE |
The buying and selling of products and services between countries. It is generally recongised that countries benefit directly from trade with other countries. This is because each country has... 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 bought and sold on the same day.... 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 liabilities from its assets... read more |
| INTRINSIC VALUE |
... 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 must be registered with the Commodity... 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 to the balance sheet. |
| INVERTED HAMMER |
The counterpart of the hammer, this is also a bullish bottom reversal candlestick formation which derives its significance from it's shadow and implies that an upward trend is imminent. The inverted... 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 down-trend. The market... 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 market capitalisation. This is used in the construction... read more |
| INVESTEC AUSTRALIA PROPERTY FUND |
04 - 11 - 2019 Investec Australia Property Fund (IAP) is a real estate investment trust (REIT) which concentrates on property investments in Australia and New Zealand. It is owned 23% by... 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 initial public offer (IPO), a rights issue or the issue and... 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 financial information. This is the basis for technical analysis.... 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 and prevents market manipulation. |
| INVISIBLE |
Any asset which is not concrete. For example, goodwill or patents, which belong to the company, are not represented by any physical object, but refer to the company's rights to something or the... 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 of the income of the country and part of its export... 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 can be included in the indices, but at a reduced weight.... 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, the plan aims to stimulate growth in... read more |
| IPO |
Usually coinciding with a listing, this is the first offer of shares to the investing public by a company. |
| 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 elect to have their federal taxable... 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 financial sector. Its objective... 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 ore from which iron can be obtained... 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 to be updated every 2 years, but... 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 what amount of money received in a year's... 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 that a larger pattern is developing.... read more |
| ISIN |
... 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, there should be an up-side... 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. This is part of the government's plan to... 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 in what is known as... 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 in what is known as... 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 from the Companies and... 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. There are five Itrix ETF's trading on the JSE:Â ... read more |
| J150 |
This was a weighted average of all gold shares traded on the JSE until the index was discontinued on 23rd March 2021 and the constituent shares folded into the JSE Precious Metals and Mining... read more |
| JANUARY EFFECT |
An American phenomena which means the tendency for securities prices to recover in January after tax-related selling is completed before the year-end.... read more |
| JET SYSTEM |
A stock market trading system which was used by the Johannesburg Stock Exchange until 13th May 2002. It was replaced by the SETS system. |
| JIBAR |
The interest rate which banks in South Africa charge each other for funds lent in the open market and it is agreed by the ten largest financial institutions in the country. |
| JOB CREATION |
The opening of opportunities to for paid work, mainly to the unemployed. Job creation has been a key objective of the ANC and the government for many years, but... read more |
| JOBBER |
Originally, a stock jobber was a market maker on the London Stock Exchange (LSE), prior to the dematerialisation of shares and the advent of electronic trading in 1986. In South Africa the term... read more |
| JOHANNESBURG INTERBANK AGREED RATE |
The interest rate which banks in South Africa charge each other for funds lent in the open market and it is agreed by the ten largest financial institutions in the country. |
| JOHANNESBURG SECURITIES EXCHANGE |
The primary securities exchange in South Africa. The Johannesburg Stock Exchange, the futures and options markets and the bond... read more |
| JOHN MAYNARD KEYNES |
Keynes was a British economist who devloped the "monetarist" school of thought in economics. He is well known for publishing a book, "The General Theory... read more |
| JOINT STOCK COMPANY |
An old term for a the first companies developed mostly in the UK and Europe. Companies have the advantage of limited liability which means their shareholders cannot lose more than the value of... read more |
| JOSEPH GRANVILLE |
A financial public speaker and writer from America, Joseph Granville championed the the idea of using volumes as a key technical indicator. He developed the On Balance Volume technique (OBV)... read more |
| JOSEPH GRANVILLE'S |
A financial public speaker and writer from America, Joseph Granville championed the the idea of using volumes as a key technical indicator. He developed the On Balance Volume technique (OBV)... read more |
| JSE |
The primary securities exchange in South Africa. The Johannesburg Stock Exchange, the futures and options markets and the bond... read more |
| JSE ALTERNATIVE EXCHANGE (ALT-X) |
The Alt-X is part of the JSE. It is a board which is available to those companies which cannot qualify to list on the "main board". The listing requirements... read more |
| JSE BANKS INDEX |
The JSE Banks Index (J835) is an actuarily weighted average of the prices of the listed banks trading on the JSE. The major listed banks include Firstrand, ABSA, Nedbank, Standard, Investec and... read more |
| JSE CODE |
An abbreviation for securities traded on an organised exchange. Share codes on the JSE are between 3 and 6 letters long - so,... read more |
| JSE GOLD MINING INDEX |
This was a weighted average of all gold shares traded on the JSE until the index was discontinued on 23rd March 2021 and the constituent shares folded into the JSE Precious Metals and Mining... read more |
| JSE GUARANTEE FUND |
The JSE maintains a fund called the "guarantee fund" which protects investors up to a certain limit against the failure of a member firm (i.e. a stockbroker) to recover securities or funds due... read more |
| JSE HANDBOOK |
A regurlarly updated hard-copy book which gives details of all the listed companies on the JSE. This book is updated three times a year and contains abbreviated financials going back five years... read more |
| JSE MAGAZINE |
A quarterly online publication produced by the JSE containing topical articles on the economy, individual listed companies and the investment environment generally. We would advise private investors... read more |
| JSE MEMBER FIRM |
To buy and sell shares on the Johannesburg Securities Exchange, you will need to open an account with a stockbroking firm. Stockbroking firms employ stockbrokers who have passed the necessary... read more |
| JSE OVERALL INDEX |
All stock exchanges have indexes which provide averages of the prices of their listed shares. These averages are normally... read more |
| JSE QUARTERLY MAGAZINE |
A three-monthly magazine sent to stockbrokers, fund managers and various other financial professionals. It is available at: https://www.jsemagazine.co.za |
| JSE RULES AND DIRECTIVES |
Rules and directives established by the JSE to govern all the workings of the exchange in terms of the Stock Exchanges Control Act (SECA). The rules are an extensive document which is available... read more |
| JSE SAPY |
This is the JSE's primary property index (J253) and it includes the 20 largest and most liquid property funds. This index reached a peak at the end of 2017 at an index level... read more |
| JSE SETS |
The London Stock Exchange's "Stock Exchange Trading Service" (SETS) electronic order book. The London Stock Exchange sold its Sets order-driven trading system to the JSE Securities Exchange South... read more |
| JSE TOP 40 |
An index of the 40 biggest companies trading on the JSE. This is a weighted index for the market capitalisation of the companies... read more |
| JSE TOP 40 INDEX |
An index of the 40 biggest companies trading on the JSE. This is a weighted index for the market capitalisation of the companies... read more |
| JSE TRUSTEES (PTY) LTD |
A company formed by the JSE to hold, invest and safeguard the surplus funds belonging to a client and held by a broker who is operating a controlled account on behalf of the client. The investors... read more |
| JSE TRUSTEES RATE |
Stock Broking firms open accounts for their customers so that they can invest on the JSE. Any funds deposited into such accounts and not used to buy shares must be transferred to the JSE Trustees... read more |
| JSE-FIN30 |
An index prepared by the JSE actuaries which is a weighted average of the 30 largest financial and industrial shares trading on the Johannesburg Stock Exchange. The Financial and Industrial 30... read more |
| JSE-IND25 |
The Industrial 25 index contains the largest 25 shares in the industrial sector weighted for their free-float market capitalisation. This index is again dominated by Naspers (over 44% weighting... read more |
| JUDICIAL MANAGEMENT |
A term from the previous Companies Act to allow for a company to be wound up for financial reasons. It is sometimes the case that a company can be saved with good management. Judicial management... read more |
| JUMBO CERTIFICATE OF DEPOSIT |
A CD worth at least $100,000. |
| JUNIOR DEBT |
Also called "junior debt" this is a category of debt instruments which have a lower priority than senior debt on liquidation. So in the event of a default, the senior debt will be paid out first... read more |
| JUNK BOND |
A bond which has less than investment grade - usually a bond issued by a company rather than a government or quasi-government organisation. |
| JUNK STATUS |
There are three major ratings agencies which have made a business out of assessing the credit risk of companies, parastatals and governments worldwide. They are Fitch, Moody's and Standard &... read more |
| JURISTIC PERSON |
An organisation which has a legal personality such as a company. This implies that it is responsible for its own management and debts (and not the investors who own the shares).... read more |
| K-SHAPED RECOVERY |
A recovery from economic recession in which different parts of the economy recover at varying speeds. The terms came into use following the 2020 COVID-19 pandemic and the recovery from the recessionary... read more |
| KAGI |
One of three types of Japanese candlestick charts that does not have time on the horizontal axis. |
| KALMAN FILTERS |
A linear system in which the mean squared error between the desired and the actual output is minimised when the input is a random signal. The filter is named after Rudolf E. Kalman, though Thorvald... read more |
| KEY REVERSAL DAY |
A day with a much wider range of trade than usual which occurs at the top or bottom of a cycle. When a key reversal day occurs at the top of a cycle, prices open in new highs and then close below... read more |
| KEYNES JOHN MAYNARD |
Keynes was a British economist who devloped the "monetarist" school of thought in economics. He is well known for publishing a book, "The General Theory... read more |
| KIMBERLEY PROCESS CERTIFICATION SCHEME |
This is a scheme which was launched at a conference held in Kimberley in 2000 and was subsequently the subject of a United Nations resolution to certify rough diamonds. The objective was to stop... read more |
| KING 3 REPORT |
A report on corporate governance and the duties of directors which has been accepted by the JSE as applying to all listed companies. The King report is now... read more |
| KONDRATIEV WAVE |
The developer of the wave theory named after him. The Kondratiev Cycle is a theory based on a study of nineteenth century price behaviour which included... read more |
| KONDRATIEV, NIKOLAI |
The developer of the wave theory named after him. The Kondratiev Cycle is a theory based on a study of nineteenth century price behaviour which included... read more |
| KRUGERRAND |
A gold coin containing exactly one ounce of gold in the form of "royal gold" which is 8.3% copper. The copper is added to make the coin harder so that it cannot easily be "sweated" or "clipped".... read more |
| KST |
Indicator developed by Martin Pring. A weighted summed rate of change oscillator. Four different rates of change are calculated, smoothed, multiplied by weights and then summed to form one indicator.... read more |
| KURTOSIS |
Descriptive measure of how flat or pointed a distribution is. In probability theory and statistics, kurtosis is a measure of the "peakedness" of the probability distribution of a real-valued... read more |
| LABOUR |
In economic terms, a factor of poduction which involves people exchanging their labour for money. Entrepreneurs are regarded as a separate factor of production - "entrepreneurial ability". In... read more |
| LABOUR BROKER |
A person or organisation that specialises in placing short-term workers. The union movement is strongly opposed to the existence of labour brokers, because, obviously, they make it possible for... read more |
| LABOUR INTENSIVE |
A term used to describe those industries like the mining industry which traditionally have a large unskilled and semi-skilled work force. Such industries are often the subject of strikes and... read more |
| LABOUR MARKET |
An informal marketplace where people exchange their labour for wages, salaries and other benefits. The flexibility of the labour market is an important... read more |
| LABOUR RELATIONS |
A field of commercial activity which seeks to optimize the relationship between business and the labour force so as to ensure a minimum number of days work lost to strike action through contented... read more |
| LAG |
The number of data points that a filter, such as a moving average, follows or trails the input price data. So, for example, you can have a 65-day exponentially smoothed moving average which is... read more |
| LAGGING INDICATOR |
Certain economic indicators regularly lag behind the business cycle because of the nature of their business. For example, large construction contracts normally have a duration of three to five... read more |
| LAGGING MOVING AVERAGE |
This is a moving average which is calculated in exactly the same way as a simple moving average, but then it is shifted back several days (user definable) usually with the objective of avoiding... read more |
| LAISSEZ-FAIRE |
This is the policy of leaving things to run their own course, without any interference. In economics, this refers to the non-interference by the government, in the free-market. It is a French... read more |
| LAND BANK |
An agricultural bank owned by the South African government that specialises in providing loans for the purchase of land, agriculutral equipment and other farming needs. The Land Bank carries... read more |
| LAND REFORM |
Part of South Africa's constitution is to remedy the imbalances of the past and part of this process is to restore land claims to those who were dispossessed during the colonial and apartheid... read more |
| LAPSE RATE |
An insurance term which is a percentage of renewal notices for insurance policies that are not then renewed. A high level of lapses can indicate that consumer disposable income is reduced and... read more |
| LARGE MERGER |
A large merger is one where the combined turnovers of the two companies merging is more than R6,6bn or the turnover of the company that is being acquired is more than R190m. Such mergers must... read more |
| LAST DAY TO REGISTER |
The date by which you must be registered as a shareholder in order to participate in a corporate action such as the paying of a dividend or a rights issue. The last day to register is three days... read more |
| LAST DAY TO TRADE |
The last day to trade (LDT) in securities, which are subject to a corporate action (such as a rights issue or a dividend), in order to ensure settlement on record... read more |
| LAST IN FIRST OUT |
In accounting, a method of valuing closing stock which assumes that the most recently-purchased stock is the first stock to be used - which leaves the oldest and usually the less-expensive stock... read more |
| LAST TRANSACTION PRICE |
The price at which a certain share was last traded. This information is normally reported on the price page of your newspaper in a column headed "last". It is sometimes called the "closing" or... read more |
| LATEST QUARTERLY EARNINGS |
The percentage change from the latest earnings reported compared with the same quarter a year earlier. |
| LAZY BALANCE SHEET |
Occasionally, you will come across a listed company which is said to have a "lazy balance sheet" because they are carrying a lot of cash and cash equivalents - which could... read more |
| LEAD |
The number of data points that a filter, much as a moving average, precedes the input price data. |
| LEADING INDICATORS |
(1) These are indicators which tend to anticipate movements in other indicators. For example, the paper and packaging industry tends to start experiencing better conditions before the rest of... read more |
| LEADING MOVING AVERAGE |
The opposite of a lagging moving average, this is a moving average that has been advanced by a few days on the chart. Advancing a moving average in this way moves it away from the price chart... read more |
| LEADING SECTOR |
This is a sector which moves ahead of the business cycle. A good example is the packaging sector. As the economy turns and moves into an expansionary phase, manufacturers see that they need to... read more |
| LEAKAGE |
An economics term which refers to money which is taken out of the normal circular flow of money within the economy. Savings is a good example, but also imports result in funds leaving the economy.... read more |
| LEAPS |
Acronym for long-term equity anticipation securities, which are long-term listed options, with maturities that can be as long as two and a half years. |
| LEASE ADJUSTED NET LEVERAGE |
The ratio of a company's debt to its earnings before interest, taxation, depreciation and amortisation (EBITDA). This ratio is widely used by... read more |
| LEAST DEVELOPED COUNTRIES |
A list of countries which have an annual gross national income per capita of less than $1025 for at least 3 years. In addition, they are countries with poor health, education, nutrition and literacy.... read more |
| LEDGER |
A "book" or more commonly today, a computer file into which transactions are entered from the journals. There are three types of ledger accounts - purchases, sales and general. Information from... read more |
| LEG |
One side of a spread. |
| LEG OUT |
In rolling forward in futures, a method that would result in liquidating a position. |
| LEGAL PERSONA |
This is a legal term that refers to the fact that, in addition to natural persons, companies are also considered by law to be persons independent of their owners or managers. Legal persona gives... read more |
| LETTER OF ALLOCATION |
A letter informing an applicant of how many shares he/she has been given in a share issue. Issue of shares, such as an initial public offer (IPO), are often over-subscribed which means that at... read more |
| LETTER OF ALLOTMENT |
A letter informing an applicant of how many shares he/she has been given in a share issue. Issue of shares, such as an initial public offer (IPO), are often over-subscribed which means that at... read more |
| LEVERAGE |
The relationship of a company's borrowings or debt to ordinary shareholders' funds. The American term for gearing is "leverage". A company can obtain the finance it needs... read more |
| LEVERAGED |
The relationship of a company's borrowings or debt to ordinary shareholders' funds. The American term for gearing is "leverage". A company can obtain the finance it needs... read more |
| LEVERAGED BUYOUT |
The acquisition of a company using a considerable amount of borrowed capital - often with the assets of company that is to be bought acting as collateral. Obviously leveraged buyouts can saddle... read more |
| LI DAVID |
A Chinese actuary and quatitative analyst who is best known for his application of gaussian copulas for securitised mortgage bonds leading to the "sub-prime" crisis of 2007/8. Li's formulae justified... read more |
| LIABILITY |
An accounting term, which records monies owed by the company to outsiders. The most common forms of liabilities are share capital and reserves (which are money "owed" to... read more |
| LIBOR |
The rate at which banks in the UK lend money to each other. This rate, usually known as "libor" is similar to the Johannesburg offer rate or "jibor" in South Africa. Banks frequently lend money... read more |
| LIEN |
A form of security or collateral for a loan - usually over movable property. A lien entitles the creditor to retain possession of the asset until the debt is paid. |
| LIFESTYLE TAX AUDIT |
The Receiver of Revenue sometimes undertakes a lifestyle audit of an individual who appears to be living beyond his taxed income and stated assets. The Income Tax Act allows for SARS to investigate... read more |
| LIFO |
In accounting, a method of valuing closing stock which assumes that the most recently-purchased stock is the first stock to be used - which leaves the oldest and usually the less-expensive stock... read more |
| LIKE-FOR-LIKE SALES |
The sales made by a retailer from the same stores which it owned in the previous financial period - as opposed to new store which have been opened in the current financial period. Same store... read more |
| LIMIT (UP OR DOWN) |
The maximum price advance or decline from the previous day's settlement price permitted during one trading session, as fixed by the rules of an exchange. The purpose of limit up or limit down... read more |
| LIMIT MOVE |
A change in price that exceeds the limits set by the exchange on which the contract is traded. |
| LIMIT ORDER |
Limit order types are orders that stipulate both a volume to be bought or sold and a limit price. Limit orders will always execute at the specified limit or better. With on-line trading, all... read more |
| LIMITED LIABILITY |
Corporate entities are juristic persons who have full legal persona. This means that they are responsible for their own debts separately from the people who own their shares. This is not true... read more |
| LINE CHART |
Technical Analysis, or charting as it is called, has three primary divisions - Formations, Line Charts and Wave and Cycle Theories. Line charts start with a simple chart of the closing price... read more |
| LINE INDICATOR |
This is a mathematical formula which is applied to a continuous stream of financial data with the objective of improving its predictability. Most line indicators have standard trading strategies... read more |
| LINEAR WEIGHTING |
The even weighting of a moving average so that older data has proportionately less impact than more recent data. In a standard moving average every price from the most recent to the oldest in... read more |
| LINKED INVESTMENT SERVICE PROVIDER |
This is a company which offers the investor a single platform from which he/she can invest in a broad range of collective investment schemes (CIS) such as unit trusts and insurance options. Linked... read more |
| LINKED UNIT |
A security which combines an equity share with a debt instrument. These securities were typically employed in property companies and still exist in some of them. The debt instrument offers a... read more |
| LIQUID |
A liquid share is one which typically trades more than R5 million but less than R500 million worth of shares every trading day. A good example of this would be a share like Dischem or Coronation.... read more |
| LIQUID ASSETS |
Assets that can be readily converted into cash. Normally, these are current assets such as debtors, stock and obviously cash or bank balances. The "liquidity" of an asset is the speed and ease... read more |
| LIQUID MARKET |
A security or commodity market with enough units outstanding to allow large transactions without a substantial change in price. |
| LIQUIDATE |
To settle the affairs of a company/firm by selling assets in order to pay creditors. When a company is liquidated, ordinary shareholders are entitled to receive their... read more |
| LIQUIDATING VALUE |
A money balance figure calculated by beginning with adjusted total equity, subtracting short option value, and adding long option value. This figure provides a critical snapshot of the financial... read more |
| LIQUIDATION |
The process whereby a company is dissolved. The court, the company itself, a shareholder, the Master of the court, the business rescue practitioner, a creditor, or the minister may initiate such... read more |
| LIQUIDITY |
The ability of a company (or person) to raise cash on short notice, usually with a view to meeting debts, unexpected expenses, or to take advantage of opportunities. It is wise... read more |
| LIQUIDITY COVERAGE RATIO |
This is a ratio used in the banking industry to ensure that a commercial bank has sufficient liquidity to meet its short-term cash outflows over the next 30 days. In general, banks aim to have... read more |
| LISP |
This is a company which offers the investor a single platform from which he/she can invest in a broad range of collective investment schemes (CIS) such as unit trusts and insurance options. Linked... read more |
| LISTED INVESTMENT |
An investment which can be traded on an organised exchange. The investment can be a debt instrument, equity or one of a number of other instruments. To have its securities listed on the JSE,... read more |
| LISTING |
A company which has obtained the right to have its shares traded on an organised exchange. The JSE has stringent requirements for companies... read more |
| LISTING DATE |
The date on which a company was listed on the JSE. Most listing are accompanied by an initial public offer (IPO) whereby the company raises capital from the public to fund its business. One of... read more |
| LISTING REQUIREMENTS |
For a company to list on the main board of the Johannesburg Stock Exchange it must have: " (1) a subscribed capital (including reserves but excluding minority interests, and revaluations of assets... read more |
| LISTINGS BOOM |
This describes a surge in companies lising on the JSE over a period of time. As a company executive, having your company listed on the JSE is attractive, as capital can be generated to grow the... read more |
| LIVE PRICES |
Share and other asset prices which are received directly from the JSE in the form of a "trickle feed". A feed of live prices is very expensive and can generally only be justified by institutional... read more |
| LIVING STANDARDS MEASUREMENT |
A categorisation of living standards in South Africa with 1 representing the poorest category of citizen and 10 representing the richest. The measure is based on a list of questions about how... read more |
| LJUNG-BOX STATISTIC |
A chi-square test of significance of higher order correlation existence. The marginal significance level is the probability that a no more higher order correlation exists. There are a large number... read more |
| LMIL |
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 is similar to the Stock Exchange... read more |
| LOAD |
Commission and fees taken out of investment capital; that is, the situation in which a front-loaded mutual fund takes commission and fees out of investment capital before the money is put to... read more |
| LOAN LEVY |
A levy imposed on citizens to help finance government expenditure. Usually the levy is compulsory and repaid by the government when they have funds available, usually by a reduction in tax. In... read more |
| LOAN STOCK |
Shares in a company which are put up as collateral for a loan. In general, a bank will lend about 50% of the current market value of listed shares given to it as collateral. Unlisted shares would... read more |
| LOAN TO VALUE |
This is the amount of debt which a real estate investment trust (REIT) or property company has as a proportion of the value of the properties which it owns. In general... read more |
| LOAN-LOSS |
A provision for loans which cannot be collected by a financial institution. A bank's loan-loss is expensed off the income statement in the calculation of its profits and... read more |
| LOCAL COUNTER-PARTY TRANSACTION |
A transaction where a member firm trades as a principal with a person in South Africa, other than a member firm in South Africa. |
| LOCALISATION |
A policy of encouraging the purchase of locally produced products over imports. In the second half of 2021, the South African government issued a directive to all government departments... read more |
| LOCKED IN |
A special arrangement whereby certain shareholders are prevented from selling their shares for a defined period of time. This is typically a condition of an acquisition where the major shareholders... read more |
| LOCKED LIMIT |
A market that, if not restricted, would seek price equilibrium outside the limit but, instead, moves to the limit and ceases to trade. |
| LOG CHARTS |
Long-term standard charts, especially of indexes, have the disadvantage that the older data cannot be compared with the most recent data. For example, the 40% collapse of the JSE Overall index... read more |
| LOGARITHMIC CHART |
There are a number of ways to display the data on a chart. A linear chart is just like the charts that you used to draw at school with both the X and the... read more |
| LONDON GOLD MARKET FIXING |
The result of a twice-a-day dedicated conference between the 15 members of the London Gold Market Fixing Ltd. Previously this meeting was held at the premises of Nathan Meyer Rothchild &... read more |
| LONDON INTERBANK OFFERED RATE |
The rate at which banks in the UK lend money to each other. This rate, usually known as "libor" is similar to the Johannesburg offer rate or "jibor" in South Africa. Banks frequently lend money... read more |
| LONDON MARKET INFORMATION LINK |
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 is similar to the Stock Exchange... read more |
| LONDON STOCK EXCHANGE |
The London Stock Exchange is one of the world's oldest stock exchanges and can trace its history back more than 300 years. Starting life in the coffee houses of 17th century London, the... read more |
| LONG |
Establishing ownership of the responsibilities of a buyer of a tradable; holding securities in anticipation of a price increase in that security. An investor who is "long of a stock" is a person... read more |
| LONG LEGGED DOJI |
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 |
| LONG NAME |
Companies which are listed on the JSE have three "names" - their long name, their short name and their code. Thus, for example, Pick 'n Pay Stores Limited is the company's long name. Its short... read more |
| LONG OPTION VALUE |
The current market value of all long options in a trading account. This amount of cash would flow into the account (less any commissions and fees) in the event that the options were offset (sold)... read more |
| LONG POSITION |
A holding of securities that benefits if the market goes up. A purchase of shares on the JSE is a long position - as opposed to a short or bear sale of the same the shares - which would be a... read more |
| LONG TERM TREND |
A trend which lasts for at least two years and usually much longer. The current upward trend on the S&P500 index has been in progress, with corrections, since March 2009 - over 11 years -... read more |
| LONG-TERM LIABILITY |
A debt, which is to be repaid over years rather than months. A good example of this would be debentures, which carry a fixed percentage return and are redeemable by the company at some future... read more |
| LOOKBACK INTERVAL |
The number of periods of historical data used for observation and calculation. For example, a 50-day moving average has a lookback interval of 50 trading days. |
| LOOP STRUCTURE |
An illegal structure where a person resident in South Africa for tax purposes owns a company or trust overseas which then, in turn, owns assets in South Africa. Certain loop structures can be... read more |
| LOOSELY HELD |
This expression refers to shares which are held by people who are not familiar with the inner workings of the company. They will sell their shares... read more |
| LOSS |
A loss occurs where a company's expenses exceed its incomes in a particular accounting period. The loss can be because of a once-off expense (such as an impairment... read more |
| LOT |
A unit of trading. In the futures market, one lot refers to one futures or options contract. In the forex market, one lot is equivalent to 100,000 units of a particular foreign currency. Originally... read more |
| LOW |
The lowest point in a price pattern over a specific period. |
| LOW PASS FREQUENCY FILTER |
A data smoother or filter that lets pass low frequency trend sinusoids and rejects high frequency noise (see SMA). |
| LOW-TICKING |
To sell at the bid price. |
| LOWER SHADOW |
A candlestick charting term which refers to the extent to which a share's price trades below its open, in a green candle or its close in a red candle. In candlestick charting the candle is coloured... read more |
| LSE |
The London Stock Exchange is one of the world's oldest stock exchanges and can trace its history back more than 300 years. Starting life in the coffee houses of 17th century London, the... read more |
| LTV |
This is the amount of debt which a real estate investment trust (REIT) or property company has as a proportion of the value of the properties which it owns. In general... read more |
| LUX |
21 - 09 - 2020 Luxe (Previously called Taste Holdings) consists of two businesses - a food franchisor and a luxury goods retailer. It had master franchises in Southern Africa for Starbucks... read more |
| LUXE HOLDINGS LIMITED |
21 - 09 - 2020 Luxe (Previously called Taste Holdings) consists of two businesses - a food franchisor and a luxury goods retailer. It had master franchises in Southern Africa for Starbucks... read more |
| M0 |
The total amount of money in the country. There are various methods for measuring the money supply, itemised and defined as "M0, M1, M2 and M3". Thus the broadest measure of the money supply... read more |
| M1 |
The total amount of money in the country. There are various methods for measuring the money supply, itemised and defined as "M0, M1, M2 and M3". Thus the broadest measure of the money supply... read more |
| M2 |
The total amount of money in the country. There are various methods for measuring the money supply, itemised and defined as "M0, M1, M2 and M3". Thus the broadest measure of the money supply... read more |
| M3 |
The total amount of money in the country. There are various methods for measuring the money supply, itemised and defined as "M0, M1, M2 and M3". Thus the broadest measure of the money supply... read more |
| MA |
An average of the most recent prices of a share progressed each trading day such that the same number of days remain in the average.... read more |
| MAC |
A material adverse change clause is included in most major contracts and allows parties to exit the contract or modify it if a something happens which significantly changes the value of the assets... read more |
| MACD |
The crossing of two exponentially smoothed moving averages that are plotted above and below a zero line. The crossover, movement through the zero line,... read more |
| MACROECONOMICS |
That part o |