PDSnet Glossary

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Definition

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 JSE typically enjoy an earnings multiple (P:E) of at least 10 while the shares of unlisted companies are usually valued at between 3 and 5 times their annual after-tax earnings. Non-fungible securities are risky because there is no guarantee of the trade. Over-the counter investment in South Africa, such as the shares of unlisted public companies, have been used in most of the investment scams in South Africa.

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