List of Glossary Terms

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z Numeric


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 minimum... 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 minimum... 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 truism like 1 + 1 = 2. This truth... 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 in the secondary market... 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 of shares (or other... 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 is a long red candle, representing... 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 against the trend of the... 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 income might be considered abnormal.This... 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 business (such as cost-of-sales... 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 is an immediate means of... 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 in favour of another. If the company... 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 additional capital from... 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 as they need it through what... 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 of conventions for totaling the... read more
 
ACCOUNTING CONSERVATISM
Accountants are notoriously conservative people. Conservatism applies to incomes, expenses, liabilities and assets of unknown amounts. To be conservative means generally... 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 of the business during the accounting.... 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 ensures that the incomes... 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, the accounting policies... 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. The 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 company in the short term (normal... 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 sheet under current assets.... 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 on the date of the balance sheet... 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 phase". It indicates that the... 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 and cash balance) is... 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 value... 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 shares then becomes the "holding... 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 phenomenon such as a hurricane,... 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 profit from the fall in their shares.... read more
 
ACTUALS
(1) Refers to actual physical commodities, as distinguished from the futures on those commodities. So, for example, there is a "spot market" for gold which shows the... 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 the minute-to-minute trading in... 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 in a stock market... 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 in a stock market... 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 into the Nature and Causes... 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 that it excludes any unrealised... 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. For example, water, paraffin,... 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 bank holds in that security's... 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 by Richard Arms, an American... 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 total number of shares down by... 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
 
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 1000c each and the share has fallen... read more
 
ADVERSE OPINION
 
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 is better than inflation... 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 any type of merger, acquisition... 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 on the JSE. Only two shares... 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 legislation, but South Africa,... 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 is the JSE with... 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. The index includes wages... 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 the return on shareholders'... 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 the return on shareholders'... 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 the return on shareholders'... 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) and then again at 3pm (the afternoon... 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 rebate allows people under the... 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 clients and has no personal interest... 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 be held within six months of... 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 legislation, but South Africa,... 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 beans, wheat, sunflower and maize... 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 part of the economy and... 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 are listed on both the AIM... 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 the economy by the injection of funds to compensate... 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 to meet working capital... 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 has become more common with... 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 has become more common with... read more
 
ALL SHARE INDEX
All stock exchanges have indexes which provide averages of the prices of their listed shares. These averages are normally "weighted" so that larger companies are more important and smaller companies... 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 very popular and in great demand... 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 a certain number of shares.... 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 trusts and other collective... 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 company concerned - as... 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 in section 1 defines an... 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 in a real estate investment... 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 are listed on both the AIM... 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 merged. The Companies Act (71 of 2008) uses the... 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 bank holds in that security's... 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 option that can only be exercised... 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 it was known used to trade on the... 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 it was known used to trade on the... 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" over five years... read more
 
ANAUME
Candlestick formation. An exceptional exhaustion pattern (meaning "gap filling") composed of five candles. The anaume occurs when the gap is filled in after a market price... 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 lines. A median line is... 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 JSE's Listing Requirements... 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 produced once a year for presentation... 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 be held within six months of... 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 words, the after-tax profit... 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 produced once a year for presentation... 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 Commission (CIPC). This return... 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 the increase in sales is more than... 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 results of other entities.... 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, it is always good to determine... 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 Darussalam; Canada; Chile; China;... 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, the shares will be heavily "over-subscribed".... 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, they normally do so by way... 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, such as a merger or acquisition,... 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 ruling in each. For example,... 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 than 1.0 is bearish. The... 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 many other books including "Trading... 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 internal affairs and management... 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 and characterised by a pattern... 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 Darussalam; Canada; Chile; China;... 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 computer system will... 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 the profits of the... 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), or intangible (e.g. goodwill).... 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 the company itself. As a private investor,... 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 to the public was protected... 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 have been a number of famous... read more
 
ASSET CLASS
A category of assets which all have similar characteristics. Thus shares, property, commodities, and fixed interest investments bonds are all particular asset classes.... 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 to meet working capital... 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 business in South Africa... 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 companies and unit... 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 in America. Financial assets... 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 between risk and security.... read more
 
ASSET STRIPPING
 
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 is to determine how efficiently... 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 position is assigned a short... 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 to planetary cycles and... read more
 
ASX
Formed in 1987 with the amalgamation of the six state exchanges, the ASX offers organised exchanges in equities, derivatives, fixed interest and commodities. It is... 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 at the price most advantageous... 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. The rate of interest which... 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 as the Johannesburg Equities Trading... 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 have been deducted, together... 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 have been deducted, together... read more
 
AUDIT
All companies listed on the JSE have to produce at least two sets of audited financial statements each financial year - interim and final. Those financials... 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 does not have the necessary... 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 audit opinion (1) an... 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 they are auditing or external,... 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 audits of all national... 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 that in their opinion they represent... 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 be stated in the Memorandum... 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 be stated in the Memorandum... 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 be stated in the Memorandum... 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 pollutants from the burning... 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 as the Johannesburg Equities Trading... 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 data. The moving average... 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 a further 100 of the same shares... 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 to determine if there is a price... 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 dividends per share. These... 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), the Average True Range (ATR) indicator... 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 clear to get out of paying tax. This practice runs the risk that it is found to be evasion rather than... 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 its merger with Gemgrow, Arrowhead... 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, such as 90 days ,from the issue... read more
 
BA RATE
The annualised interest rate at which financial institutions (typically banks) accept or discount bills of exchange. Often in business a company in need of... 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, or nearby, delivery... read more
 
BACK OFFICE
 
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 to determine whether a... 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 that a 200-day moving average... 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 bounded on the upside by a... 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 longer hours up to the point where... read more
 
BACKWARDATION
A futures market phenomena in which the relationship between two delivery months of the same commodity is abnormal. The opposite of "contango".
 
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 called Biomin in South Africa... 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, a figure that is adjusted annually.... 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. The justification for this... 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 more foreign currency... 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. While the balance of trade... 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. These balances are combined... 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, preferred stocks... 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 more foreign currency... 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, acquisition... 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 filter to the data and then... 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 the business... 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 of 7 European countries... 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 controlling inflation... 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 project. A key element of a bankable... 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, such as 90 days ,from the issue... 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 which the debts and interest will be... 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). This is as distinct from the term... 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 funds transfers (EFT). It gives... 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 based on a survey of larger companies.... 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 price with a vertical bar. The... 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, the U.S. Dollar is normally... 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 much impact as the oldest month... 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 source which is constant and... 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. Some base metals also corrode,... 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 (UIF) and sometimes other agreed... 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 which could have knock-on effects... 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 which could have knock-on effects... 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 Reserve Bank announces that... 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 ounces of gold and the gold... 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 it rates companies according... 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. This is a measure of ship... 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, bulls and bears constantly... 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 than the previous low. Bear markets... 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 so that they can cover their positions... 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 bull trends are interrupted... 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 funds transfers (EFT). It gives... 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, such as 90 days ,from the issue... 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 called Biomin in South Africa... 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
 
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 the next day, 20th... 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 markets around the world... 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 Bank, Pick n Pay, Standard... 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
 
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 either green (when the close... 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 principal must be paid. The South... 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
 
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 more foreign currency... 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 and so establishing a... 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 of revenue. This is disclosed in... 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 than the previous low. Bull markets... 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 you should be 100% invested in... 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 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 of opinion because it depends on... 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 simplest example of a buying signal... 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 a Bachelor of Commerce or Bachelor... 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 a Bachelor of Commerce or Bachelor... 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 than funds which require a notice... 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 date (European). By the... 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 date. Call warrants are issued... 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 basis. A negative value for the... 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 having been filled. In such a case,... 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. The greater the volume, the... 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 X-axis which can create... 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 is composed of multiple candles,... 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 either green (when the close... 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. The price range between... 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 to convert part of its reserves... 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  the Cape Horn in South America.... 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 to purchase some sort of fixed... 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 investing into and disinvesting... 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 its Tier I, Tier II... 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 the purchase of plant and machinery... 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 portfolio and other... 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 will be people investing into... read more
 
CAPITAL GAIN
When a gain is made when an investment is sold for more than its purchase price, it is called a capital gain. This must not be confused with the definition of Capital Gains Tax... read more
 
CAPITAL GAINS DISTRIBUTION
 
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 for it, you will have to pay tax... 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 their production process.... 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 markets typically have a... 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 projects. Companies usually... 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 of shares and long-term... 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 to convert part of its reserves... 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 company by shifting loans... 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 proposed the concept... 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 proposed the concept... 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 "tricks" which private investors... 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 give up their optimism and sell... 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 10% "cap" which means that no single... 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 to reduce the tax which they... 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 at the rate of R120 per ton... 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 includes the burning of fossil... 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 extracted. The carbon... 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 countries have set a goal to become... 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 to reduce the tax which they... 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 at the rate of R120 per ton... 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 rates than first world... 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 trades.
 
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 on the invested funds as well... 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 with each other. An agreement is... 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 because the company... read more
 
CASH ASSET / SHELL
A company which has cash or near-cash as its only asset. Besides the income derived from investing this cash, these companies have no income-producing... 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). This ratio shows how effective... 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 easily go bankrupt if its... 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 it from any futures... 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 and cash balance) is... 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 commodity). This is typical of a financial future where there... read more
 
CASH SHELL
A listed company which has cash as its only asset and conducts no business. Occasionally, a company will sell all of its assets because it can get good prices for them and then ends up with just... 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 forms a double top at a higher... 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. These announcements appear... 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, gold, silver and... 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 a public censure. Sometimes, a... 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 the ECB (European Central... 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 Party in the 1950's to create... 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 Africa, this function is performed... 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 as STRATE (Share TRAnsactions... 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, according to the Companies Act,... 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 in about the year 2000, most... 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 educuation providers. There... 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, financial... 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 for it, you will have to pay tax... 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 technical analysis tool compares... 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 directors unless he is given... 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 report, especially for... 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 often find when looking at charts... 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, the Public Protector, the... 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 company, the share price can drop... 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 a Bachelor of Commerce or Bachelor... read more
 
CHARTING
The analysis of group investor behaviour, as reflected in the patterns of share prices and volumes, indices, exchange rates and other data streams. More commonly known as charting, this consists... 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, low, open and... 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 to be trading in the market... 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 Clearing House in the world.... 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, according to the Companies Act,... 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, financial... read more

 
CHINESE WALL
A communications barrier between members or departments of a financial institution to prevent the transfer of price sensitive information. Chinese walls are imaginary but are taken... 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 about 60% of the world's... 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 about 60% of the world's... 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. It has the power to issue "compliance... read more
 
CIRCUIT BREAKER
A system of limiting trading highs and price limits on equities and derivatives markets designed to provide a cooling-off period during large, intraday... 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 public invest in a portfolio... 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. Santam breaks the definition... read more
 
CLASS
Some listed companies may issue a variety of different shares with different risk profiles to entice investors to support them. For example, there are ordinary... 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 which are incentive-based... 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 be registered and eventually settled... 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 shows that global warming... 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 prices calculated during the... 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 bureacracy associated with setting... 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 and technical analysis... 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, this period cannot be more... 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 purchase a shareholder's shares... 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 prices calculated during the... 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 usual calculation for cost of sales... 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 on the JSE were dematerialised,... 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 Clearing House in the world.... 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 and comes in four grades - Lisnite,... 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, for example, the code for Sasol... 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 developed from the International... 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 employees, how to determine whether... 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 up or down. Obviously, the country's... 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 itself and the improvements are... 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 be anything from rare stamps, to... 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 direct interest in settling negotiations... 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 public invest in a portfolio... 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. Most of these cases are settled... 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 and other trading strategies.... 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. Thus it excludes government... 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 it. The quarterly labour force survey... 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 the business... 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) are traded in markets... 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 countries, a large percentage of... 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 and peaked at $2000 a ton in early... 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 commodities of various types.... 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 options. Providing advice... 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 https://www.cipc.co.za/files/2413/9452/7679/CompaniesAct71_2008.pdf.... read more
 
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. It has the power to issue "compliance... read more
 
COMPANY
An organisation which is registered with the Companies and Intellectual Properties Commission and incorporated in terms of the Companies Act (71 of 2008). Companies are juristic... 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 and the company must ensure that... 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 to the JSE Rules and... 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
 
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
 
CONGLOMERATE
 
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 level. This is called a sideways market... 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. The index includes wages... 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
 
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—read more
 
CONTROL PREMIUM
 
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 wiring, in plumbing and construction.... 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 of 2008). Companies are juristic... 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 a temporary downward move... 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
 
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 be bought and sold by members... 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 trend". It has been well said... 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 trend". It has been well said... 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 which the debts and interest will be... read more
 
COVER
 
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 return on the underlying common... 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 of 2020, the disease had spread... 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. They strive to... 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 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 and anything above that is caled... read more
 
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
 
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 or over 10 million are behind by... 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 has had to write off... 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 company in the short term (normal... 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 developed from the International... 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 United States, a GBP/JPY (British... 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 are extremely difficult... 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 Africa, this function is performed... 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 as STRATE (Share TRAnsactions... 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 options. Providing advice... 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 div" passes on the right to the... 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 are paid out before ordinary 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 is usually more than one or two... 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 of managing their own affairs... 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 it was known used to trade on the... 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 that actually had the... 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 certifying a deposit of gold at... 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 which have active markets... 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 with other countries. It shows... 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 for a short time. Most commonly, these are stock, debtors... 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 be repaid within the normal commercial periods (30,... 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 obligations out of its short-term assets (as these... 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 so that it is easily identifiable.... 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 shares held in electronic format by STRATE.... read more
 
CUTOFF FREQUENCY
A point where higher frequency cycles will not pass through a filter (e.g., a 10-day SMA 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 2 to 5 years, secondary trends... 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) then consumers tend to... 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) then consumers tend to... 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 knowing what... 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. This process... 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 another... 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. The most common form of this is the end-of-day high, low, open, close and volume for each listed equity share. But there are... read more
 
DATE ISSUE CLOSES
The date on which a rights issue closes. A right issue is the issue by a company of additional shares to its existing shareholders. Shareholders who have received their rights must exercise them... 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. This date is usually followed by the last... 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 Incorporation... 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, the last day to register (LDR) by... read more
 
DATE OF PAYMENT
The date on which a dividend is paid. These days, dividend payments are mostly paid directly into shareholders' stockbroking accounts automatically. There are five dates associated with 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 date of record is normally... 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 the main index of the Frankfurt Stock exchange, better known as the "Dax". This is a simple average of the 30 largest companies trading on the Frankfurt Stock Exchange - and so is the... read more
 
DAX
This is a simple index of the thirty largest shares trading on the German stock exchange. The DAX is a Paasche index which began on 30-12-1987 at a base value of 1000. The DAX generally follows... read more
 
DAX INDEX
This is a simple index of the thirty largest shares trading on the German stock exchange. The DAX is a Paasche index which began on 30-12-1987 at a base value of 1000. The DAX generally follows... 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, both in cents and as... 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 engaged in a wide... read more
 
DBSA
The DBSA is a government funded and run bank which aims to promote development in South Africa and the rest of Africa. It is involved in the design, preparation, funding and building of infrastructure... read more
 
DCM
 
DE-LEVERAGE
Leverage is an American term which refers to the level of debt which a company has in relation to its equity. In South Africa we use the term "gearing" to mean the same thing. When a company... read more
 
DE-LISTING
The removal of a security from an organised exchange - after which it can no longer be traded. This typically happens in the share market when a company has been taken over by another 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 at the start of a bear market where the extent of the initial fall is beyond... read more
 
DEAL
In the context of the share market this means a transaction whereby shares are exchanged for cash, either in the primary or the secondary market. In heavily traded shares, like Naspers as much... 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 subsequent... read more
 
DEALING COSTS
The costs of trading in shares are brokerage - which varies according to the stockbroker you are dealing through, STRATE settlement costs (0,005% of the value of the transaction) and securities... 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 certain specified date, but in some cases... 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 than was available... 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 usually not interest-bearing.... 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, section 8) says that the debt ceiling can only... 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 which the debts and interest will be... 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 enterprises... 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, section 8) says that the debt ceiling can only... read more
 
DEBT MORATORIUM
A period of grace on the repayment of debt and the interest due on it. If a company is placed underr business rescue, then it is immune to any attempt to pursue its debts at law until the business... 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% - and it has come down... 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 analysts to determine whether a company is over-borrowed... read more
 
DEBT/EBITDA RATIO
The ratio of a company's net debt (or interest-bearing liabilities) to it earnings before interest, taxation, depreciation and amortisation (EBITDA). A ratio above 3 can indicate that the company... 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: shareholders' equity (consisting of the... 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 of 30 days, or... 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 in the year).... read more
 
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 sheet under current assets.... 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.
 
DECLARATION DATE
The date on which the board of directors declare their dividend. This date is worth noting for the shares which you are following.
 
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. This date is usually followed by the last... 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 has the strike price of the 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
The distant delivery months in which futures trading is taking place, as distinguished from the "nearby" futures delivery month which refers to the next futures contract to mature.
 
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 before ordinary shareholders. Deferred... 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 account, reflects only the amount... read more
 
DEFICIT
Government borrowing is the excess of a government's spending over its income in a particular year. The deficit is usually funded by government borrowing. The size of the deficit is usually expressed... read more
 
DEFICIT
This is the difference between government revenue and expenditure. Typically, governments spend more than they receive from taxes and other types of revenue. This is disclosed in... 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 1929, the Federal... 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 price data for free.
 
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 price data for free.
 
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 in the best interests... read more
 
DELISTING
A term decribing the removal of a company from the JSE and the termination of its listing. Companies delist for a number of reasons, but usually because their share is very thinly traded or is... 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 a cash commodity. Most... 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 stocks 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 the South African... 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 imporve focus and to give each operting unit autonomy over decision making. It is also done to unlock shareholder... 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. In other words share... 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 reasonable to charge... 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 are a normal part of the business... 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, on their trading platforms,... 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 competently, professionally and impartially advise the applicant... read more
 
DESTOCKING
The reduction in a company's stock levels. Stock is a part of a company's working capital and as such it means money tied up, usually costing the company interest on its overdraft. For this reason... 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 the main index of the Frankfurt Stock exchange, better known as the "Dax". This is a simple average of the 30 largest companies trading on the Frankfurt Stock Exchange - and so is the... read more
 
DEVALUATION
The reduction of a currencies value in a fixed exchange rate system. Most currencies are allowed to float and are freely traded with market forces determining their equilibrium prices. However... 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 enjoy more rapid growth... read more
 
DEVELOPMENT BANK OF SOUTH 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 engaged in a wide... read more
 
DEVELOPMENT BANK OF SOUTHERN AFRICA
The DBSA is a government funded and run bank which aims to promote development in South Africa and the rest of Africa. It is involved in the design, preparation, funding and building of infrastructure... read more
 
DEVELOPMENT CAPITAL MARKET
 
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 as "diagonals", especially over the long term. If... 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
 
DIFFERENCE-IN-MEANS TEST
A statistical test that indicates the likelihood of observing the difference if the true difference were zero. A large value of this statistic leads to non-acceptance of the null hypothesis that... read more
 
DIFFERENCING
Subtracting previous from current values to obtain a stationary (detrended) time series: P stationary = Pt - Pt-1.
 
DIFFUSION EQUATION
A partial differential equation, used in solving a random walk problem.
 
DIFFUSION INDEX
 
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 average number of shares in issue during the accounting... 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 earnings per share for the original... 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 higher than yesterday's... 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 by their consent on a signed CM27 form lodged... 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 on the Stock Exchange News Service... 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 since... 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, the business and profitability of the company. The... 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 audit opinion (1) an... 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 does not have the necessary... 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 good investment... 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 part of that core business.... read more
 
DISCOUNT BROKER
This is a stockbroking firm that does not undertake research into listed companies or give advice. For this reason the cost of dealing through a discount broker is much lower than through a "full... 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 they passed... 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 analysis indicates... 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 the profits and hence the... 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 Payments (BOP). Overseas... 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 bond repayment, money for food and clothing, school fees, insurance, taxation, money for... 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. A fundamental transaction is a major... 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 portion of remaining assets... 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", the provisions of chapter 6 of the Companies... 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
  1. The payment of a dividend.
  2. Any set of related values described by an average (that is, mean), which identifies its midpoint, a measure of spread (that is, standard distribution)... read more
 
DISTRIBUTION
That portion of a company's earnings which is paid out to shareholders - also sometimes called a "distribution". Most blue chip companies have a dividend policy... 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 part of that core business.... 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 have a dividend policy... 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 which you will get... 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 10 000 ordinary shares in... 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 since... 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 varieties of doji lines (such... 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 a possibility that the downward trend... 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 volume, retreat to a support level, and subsequently return to... 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 economists... 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. Finally when the support is exhausted, the price breaks... 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 trendline which connects... 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 long downward trend in a share's price, a sector's index, the all-market index or other indicator. Bear trends and bull trends are interrupted... 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 trendline which connects... 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 which you will get... 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 10 000 ordinary shares in... 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. Earnings in South Africa are subject... 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 express the gearing... 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 yield", and is used by... 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 per share and a market price of 250 cents would have an 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 express the gearing... 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 by consumer spending which,... 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 interest rates, increase... 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 and how people make financial decisions.... 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. The most commonly used... 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 capital... 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
  1. The ability to recover an original configuration.
  2. The elasticity of demand or supply refers to the degree to which demand or supply responds to changes in price. For example,... read more
 
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 enjoy more rapid growth... 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. Ordinary shares are often... 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 only about 10% of the trades done... 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 shares, bonds or commodities,... 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
 
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 to the buyer, even if it has not yet been actually... 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 an organised exchange and there... 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 throughout the day. The same is... 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 shares, bonds or commodities,... 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 is a value judgement and each analyst and investor will... 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 from the value of its exports... 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 per share and a market price of 250 cents would have an 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 accounts - like fixed assets or turnover - while... 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
 
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, Richmond, Atlanta, Chicago, St Louis,... 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, Richmond, Atlanta, Chicago, St Louis,... 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
 
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 produced once a year for presentation... 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 produced once a year for presentation... 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 produced once a year for presentation... 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 of conventions for totaling the... 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 educuation providers. There... 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 produced once a year for presentation... 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 more commonly known as the "footsie". Like most markets around the... 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 ensures that the incomes... 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", the provisions of chapter 6 of the Companies... read more
 
FINANCIALS
These are share in the financials sector of the JSE. They are mainly involved in banking, asset management or insurance. Financial companies are inherently... read more
 
FINISHED GOODS
Products which are ready for sale. Usually a manufacturing company will divide its stock into 3 categories - raw materials, work-in-progress and finished goods. Finished goods are those products... 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 currencies are generally... 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 means decreasing taxes... 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 - anyone who issues and sells... 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) and place it in traditionally... 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 hold, then those shareholders... 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 phenomenon such as a hurricane,... 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 in an international... 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 in an international... 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 in an international... 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 to improve prediction... 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 are completely... 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 are completely... 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 move upwards into a new... 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
 
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 is no opportunity for investors... 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 companies and unit... 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 establishing the... 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 examination of the... 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 of 6" which excluded Canada.... 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 to be... 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 is also considered the sum of... read more
 
GEARING
The relationship of a company's borrowings or debt to ordinary shareholders' funds. A company can obtain the finance it needs to conduct its operations from two sources: by the issuing of its... 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 be held within six months of... 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 Development Act (MPRDA - 28 of... 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 to develop a view on the state of... 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. In the past, South Africa has been the largest supplier of gold in the... 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 to Treasury bills (or T-Bills as... read more
 
GOVERNMENT BORROWING
Government borrowing is the excess of a government's spending over its income in a particular year. The deficit is usually funded by government borrowing. The size of the deficit is usually expressed... read more
 
GOVERNMENT DEBT
Government borrowing is the excess of a government's spending over its income in a particular year. The deficit is usually funded by government borrowing. The size of the deficit is usually expressed... 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 from power (Eskom) to forestry... 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 at the rate of R120 per ton... 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 the economy by the injection of funds to compensate... 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 is also considered the sum of... 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 with sales and subtracts... 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.
 
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 by consumer spending which,... 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 the start of an upward trend is likely to begin. The hammer consists of a candle which has a lower shadow at least twice the length of the candle's... 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, the British pound, the Japanese yen, the... 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 reckoned to be where the "smart" money sells... 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 the accounting period.... 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 holds a large number of listed securities in a particular company... 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 the accounting period.... 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" for the day which is quoted in... 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 track record of generating growing... 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 holds a large number of listed securities in a particular company... 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 in a reduction in the profit of the company in the period... 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 in a reduction in the profit of the company in the period... 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 the purchase price of the security, the... 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, dividends or... 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 Incorporation... 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, sub-sectors and entire... 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 of computers there has been an explosion... 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, sub-sectors and entire... 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
 
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 will see that the share market... 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 will see that the share market is divided into sectors.... 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, you will see that the share market is divided into sectors.... 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 by the consumer price index... 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, before that information has been made public.... 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, before that information has been made public.... 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, before that information has been made public.... 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 companies, unit trusts... 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 risks that... 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 peson or company lends money to another then interest is charged at a percentage of the capital lent over a period of time. Interest rates are typically... 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 versa. The interest rate is the... 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
 
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 their financial year. These "interims" are published... 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
 
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
 
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 down-trend and signals the end of that down-trend. The market makes a left shoulder with... 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
  1. An asset on the balance sheet that refers to the shares held in a company or loans granted to other companies, which do not amount to or confer a controlling... read more
 
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 to specific investments. Investment... 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
Small, private organisations in which a group of investors, usually novices, pool their time and resources to learn more than they could on their own about various forms of investments and then... 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 institutions (pension funds,... 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
 
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 break-out from the island,... 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 the "primary market". This is... 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 Intellectual Property... 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 the "primary market". This is... 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: ... 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.
 
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 the reality is that unemployment... 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 market are all part of... 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 of Employment Interest and Money" in which... 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 market are all part of... 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, for example, the code for Sasol... 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 "weighted" so that larger companies are more important and smaller companies... 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 it includes and their "free... 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 it includes and their "free... 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 of Employment Interest and Money" in which... 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 in its 3rd version and the... read more
 
KONDRATIEV WAVE
Developer of a wave theory. The Kondratiev Cycle is a theory based on a study of nineteenth century price behaviour which included wages, interest rates, raw material prices, foreign trade, bank... read more
 
KONDRATIEV, NIKOLAI
Developer of a wave theory. The Kondratiev Cycle is a theory based on a study of nineteenth century price behaviour which included wages, interest rates, raw material prices, foreign trade, bank... 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 market place where people exchange their labour for wages, salaries and other benefits. The flexibility of the labour market is an important element of the general efficiency of the... 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 date (RD) and qualify for the... 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 be used for profitable... 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 net debt (or interest-bearing liabilities) to it earnings before interest, taxation, depreciation and amortisation (EBITDA). A ratio above 3 can indicate that the company... 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
  1. The American term for "gearing" on the balance sheet where debts exceed equity.
  2. The ability to control large dollar amounts of a commodity with a comparatively small amount... 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 the shareholders), long-term... 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 portion of remaining assets... 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 to keep a portion... 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 seeking to have their shares... 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.
 
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 Y axis showing one unit for each interval.... 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. The Rickshawman... 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 easily, especially if the price rises a little.... 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. The moving average is the most... 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, and divergences generate buy and sell signals.... read more
 
MACROECONOMICS
That part of economics which looks at the economy as a whole and how it functions both internally and externally, in its relationhships with other economies. This is as opposed to microeconomics... read more
 
MAIDEN DIVIDEND
The first dividend paid by a company after listing on the JSE. A company's first dividend is typically the subject of much speculation. The prospectus will give a five year projection of how... read more
 
MAIN BOARD
To be listed on the main board of the JSE a company must have at least R1m in subscribed capital in the form of at least 1 m shares. It must have a satisfactory profit... read more
 
MAINTENANCE MARGIN
A set minimum margin (per outstanding futures contract) that a customer must maintain in his margin account to retain the futures position. See also Margin.
 
MAIZE
A cereal crop widely cultivated and used for a multitude of food products either directly (as with sweet corn) or indirectly as feed for other animals like chickens or cattle. Maize meal is the... read more
 
MAJOR AUCTION
The overall trend of the market such as might be observed on a bar chart.
 
MAJOR SHAREHOLDER
A shareholder with a dominant shareholding, but insufficient to give them control of a company. When a shareholder acquires more than 35% of a listed company they are required to make an offer... read more
 
MAJORITY SHAREHOLDER
The shareholder or group of shareholders who own a controlling interest in the company - usually 50% of the voting shares plus 1 share. Obviously, the identity of the controlling shareholder... read more
 
MANAGED 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
 
MANAGED FUND
A managed fund is similar to a collective investment scheme (CIS) in the sense that investors' funds are pooled and managed by a professional fund manager for a fee. Most stockbroking firms offer...