The directors' report to shareholders setting out, in both text and financial terms, details of the company's performance during the past year and the state of its finances and assets as at the latest reporting date, usually the Balance sheet date

The price at which the holder of a security is prepared to sell that security

The maximum number of common and preferred shares that a company is legally allowed to issue

An investor who is negative towards shares, believing prices will fall. Someone who believes the stock market will decline

A market in which prices are declining. A Bear market is one where share prices across the entire market are generally and consistently falling

A stock or bond, which does not have the owner's name, recorded in the books of the issuing company or on the security certificate itself. The holder of the certificate is the owner. Interest, dividend or any profits from sales are payable to the holder

The highest price a person is willing to pay for a security

A certificate which is evidence of a debt on which the issuer promises to pay the holder a specified amount of interest for a specified length of time and to repay the loan at maturity. A Bond is a debt security issued by such entities as corporations, governments or other government entities. A bondholder is a creditor of the issuer and not a shareholder

An investor who is positive towards shares, believing prices will rise

A Bull market is one where share prices across the entire market are generally, and consistently rising

The markets for medium to long term investments, i.e. 3 years and over. This market brings together all the providers and users of capital, all the financial products such as stocks and bonds which make the transfer of capital possible and all the people and organizations which support the process

The charge made by your stockbroker for conducting your buy or sell instructions. This may either be a percentage of the value involved or, for small deals below a stated and agreed value, a fixed rate

The commonest form of shares and carry voting privileges. Holders of common shares are the risk bearing owners of the company. The common shareholders may receive a dividend that varies in amount, being subject to the company's profitability and the directors' recommendations. Dividend is paid only after preferred shareholders are paid. Holders of common shares are the last in line after creditors, debt holders, and preferred shareholders to claim any of a company's assets in the event of business failure.

This means "with dividend" Buyers of shares quoted cum dividend are entitled to an up coming already declared dividend

This means with rights. Buyers of shares quoted cum rights are entitled to forthcoming rights issue

Money borrowed from lenders for a number of corporate or personal purposes. The borrower pays interest for the use of the money and is obliged to repay the principal amount on a set date

A means of reducing the risk of serious losses by distributing capital over a number of investment options. Diversification can be by industry, maturity, country, regions, currency etc

The sum paid by the company to its shareholders as their direct financial reward from holding the company's shares. It is the income received from an investment in the company's shares.
Dividend is distributed out of the company's profits to shareholders in proportion to the number of shares they hold. Dividends may fluctuate with the profits of the company. A company is under no legal obligations to pay dividends

That part of the company's share capital represented by ordinary, or voting, shares. It is the risk-sharing aspect of the company's invested capital

This means "without dividend" If a share quoted ex dividend is purchased the investor is not entitled to an upcoming dividend. The seller receives this dividend because he was the holder of those shares at the time the dividends were declared

Buyers of shares quoted ex rights are not entitled to forthcoming right

Securities that generate a predictable stream of interest or dividend income such as bonds, debentures and preferred shares

This is the part of the authorized shares which have been issued by the company

Institutional investors manage the combined assets of a number of investors, both large and small. Institutional investors can range from pension funds to investment companies. A number of employers in the Caribbean invest their employees' contribution with institutional investors

The purchase or ownership of a security to make money by gaining income, increasing capital or both. Investments may also include such things as antique, real estate precious metals etc

There are two types of investment products; debt and equity

Any of several risks incurred when making investments, for example financial risk, market risk, interest risk, exchange risk, inflation risk etc

An individual whose principal concern in the purchase of a security is the minimization of risk. The investor invests money in investment products

The portion of an investment portfolio that is not fully invested, but is represented by cash holdings. Also, the level of continual buy and sell activity making up the market demand for the shares and indicating the ease with which investors can undertake transactions

The stock of a company, which is traded on a stock exchange. Companies pay fees to the stock exchange to be listed and must abide by the rules and regulations set out by the exchange to maintain the listing privileges

The part of the capital market in which short term financial obligations are bought and sold

A stock or bond issue sold by a company. A stock or bond issue sold by a company for the first time. Proceeds may be used to retire outstanding securities of the company, or be used for new plant and equipment or for additional working capital

The price the Market Maker will require in order to sell to you the shares you seek to buy

A securities market made up of dealers who make trades over the telephone and or computer

The entire combination of securities or investments an individual or institution holds. A portfolio can contain a variety of government or corporate instruments from different countries etc

Shares in the company usually paying a fixed rate of dividend and, usually, carrying no voting rights. Whilst ranking ahead of common shares, they effectively form unsecured debt of the company. They often have a fixed date or period for redemption of the capital invested. Owners of preferred shares are entitled to a stated dollar value per share in liquidation and a fixed dividend paid ahead of the company's common shareholders. Preferred shares are usually considered fixed income investments

The market in which securities are sold at the time they are first issued

The formal document issued by or on behalf of the company when it is first seeking to sell shares to the public. It describes the company's business background, assets and financial performance. It probably also features an official forecast on future performance expectations. Prospectuses, or offer documents, will also be published for any subsequent issues of new shares, such as a rights issue

This is a temporary privilege granted to a company's existing common shareholders to acquire additional common shares directly from the company at a stated price. The price is usually at a discount to the market price of the common stock. Rights are usually for a limited time. Holders of rights have three options;

• they can exercise i.e. buy all the rights that they are entitled to
• buy a portion of the rights that they are entitled to; or
• do nothing and let the rights expire

In its simplest sense, risk is the variability of returns. Investments with greater inherent risk must promise higher expected yields if investors are to be attracted to them. Risk can take many forms. There is the risk of paying too much for an asset, Currency Risk, Exchange Risk, Market Risk, Political Risk

Secondary markets are the stock exchanges and the over the counter market. Securities are first issued as a primary offering to the public. When the securities are traded from that first holder to another they trade in these secondary markets

The general name for stocks shares and bonds issued by the company to investors

someone who owns preferred or common shares in a company

Ownership interest of common and preferred shareholders in a company

The difference between the buying (offer) and selling (bid) prices

A market in which there are comparatively few bids to buy or offers to sell or both. The phrase may apply to a single security or to the entire stock market. In a thin market, price fluctuations between transactions are usually larger than when the market is liquid. A thin market in a particular stock may reflect lack of interest in that issue or a limited supply of the stock

The obligation for companies to promptly release corporate information to the public. This obligation is imposed by the stock exchanges on listed companies. Broad dissemination of corporate information on a timely manner allows all investors to trade the company's securities with the same knowledge about the company

The amount of shares bought and sold on a stock exchange

The percentage rate of return paid on a bond or other fixed income security if an investor buys and holds it to its maturity