Banking news. Not everyone who enters the stock market knows everything about the stock market. Some people get involved in stock trading even when they are attracted by their friends. However, when they do not understand the general things about the market, they feel that they are far behind. Similarly, some people do not have the necessary information about the stock market to keep the desire to enter the market. In view of your similar problems and needs, BankingNews.com has come up with some important terms related to the securities market.
Dividends and bonus shares
Dividends are the returns paid to its shareholders from the profits earned by the company. If such dividend is paid in cash, it is called cash dividend and if it is paid in shares, it is called bonus share or stock dividend. In order to capitalize the savings or reserve fund of the company, additional shares (bonus shares) are thus provided to the existing shareholders or the paid up capital is increased. The amount of dividend is decided by the board of directors.
Merchant Bank is an organization that manages the primary issuance of securities, guarantees and collects applications and details for securities transactions.
A securities dealer who buys and sells securities on behalf of a customer is called a securities broker.
A securities dealer is a person who buys all or some of the securities issued in the primary market and sells them through the stock market and manages the investment by entering into an investment agreement with the customer. A securities dealer buys and sells securities through a customer or a securities broker in his own name.
A market maker is an institution that trades securities in its own name for the purpose of providing liquidity in debentures or collective investment schemes or listed securities issued on the securities of the Government of Nepal.
An organization is responsible for keeping records of the securities transactions of the organizations and for taking care of all the work related to the rejection or registration of the entries and keeping the information of the shareholders up to date.
Debentures are securities issued on the condition that the principal and interest are paid at the prescribed rate and time. Its face value is usually Rs. Debenturers receive interest annually or semi-annually at a fixed rate on their investment. Debenturers receive interest before they pay dividends on ordinary shares and preferred shares. Even if the organization is at a loss, there is no obstacle for the debenture holders to get the prescribed interest. The relationship between the debenture holder and the organization is like that of a lender and a debtor. If. If the company is unable to pay the interest at the specified rate and time, the debenture holders can take action to send the company to liquidation. Most investors who do not want to take risks prefer to invest in debentures. Debenture holders do not have the opportunity to attend the company’s annual general meeting and vote. Debentures are secured (secured by company assets or mortgaged) or unsecured, redeemable (repayable after a certain period of time) or irrevocable and convertible (can be converted into ordinary shares after a certain period of time) or unchangeable in nature.
A warrant is a securities instrument issued to purchase ordinary shares at a specified number and price at a given time. In other words, a warrant is a right given to investors to buy ordinary shares of a company in the future. Generally, warrants are issued along with bonds to make the issuance of bonds attractive to investors. Investors are free to decide in the future whether or not to purchase ordinary shares using a warrant. When using a warrant, it is converted into ordinary shares, but the bond remains the same. The issuance of a warrant discloses the price to be paid for the purchase of ordinary shares in the future, the ratio of ordinary shares to be obtained using the warrant and the time period for which the warrant has to be used.
Blue chip stock
Blue chip stocks are shares of an organization that have been making profits for a long time by efficiently managing the organization and have been paying dividends to the investors as well as winning the trust of the investors by being aware of the accountability towards the investors. Most of these types of stocks have a high price and the dividends are moderate.
Central Depository System of Securities
The central depository system of securities is a system that enables all the securities holders to take care of the securities and facilitate the completion of purchase and sale records, transfers, transfers etc. in a simple and quick manner. Securities holders can open an account by depositing their securities under this system just like depositors keep money in a bank. This system eliminates problems like loss of securities, loss, theft, issue of counterfeit shares. This system also helps reduce transaction costs.
If there is no sale of securities to be issued in the primary market, the agreement to buy such securities is called securities guarantee.
Before issuing securities in public, the concerned organization should publish the statement. The prospectus discloses the details related to the organization that wants to issue the securities and helps the investors to decide whether to invest in the securities of the respective organization or not based on those details.
High and low demand for securities
The demand for more securities is called high demand for securities and the low demand for securities is called low demand for securities. In case of high demand for securities, there is an arrangement to distribute the securities by giving more burden to the group demanding less and less to the group demanding increasing amount of securities.
The difference between the issue price and the face value of the securities is called Hzshgm. The issuance of securities at a price higher than the face value of the securities is said to be the issuance of securities in HZGM.
Purchase offer and sale offer price
The value of the securities that a potential buyer wants to pay is called the value of the securities. The trading of securities is completed after the receipt of the signature of the securities broker marked on the trading board of the securities market.
Paid value of listed securities
The sum of the value of the listed securities paid by all the securities holders is called the paid up value of the securities.
Market capitalization is the sum of the market value of all the securities listed on the stock exchange market. Market capitalization is obtained by multiplying the number of securities listed in the market and their value by multiplying their market value.
The market indicator is the ratio between today’s total market value of listed securities and the total market value of a base year. This indicator increases when the value of listed securities increases and decreases when it decreases. Nepal Securities Exchange Market Ltd. in Nepal. Each day produces this type of indicator, which is called LVQV XLMBH.
Market value per share
The market value of a stock is called the market price per share.
Earnings per share
Earnings per share are obtained by dividing the company’s net profit by the total number of shares of the company. Earnings per share provide a significant measure of profit for shareholders and individuals outside the company. A company with rising earnings per share is considered to be successful in performance while declining earnings per share is considered a sign of problem.
The total value of the company’s paid-up capital and total reserves is the company’s net worth. Dividing the net worth by the total number of shares of the company gives the net worth per share or the book value of the shares.
Price sensitive information
Price sensitive information is information about the company’s dividend distribution or bonus share issue, management changes, expansion plans, financial quantities, important agreements with other parties and events that directly affect the value of securities and other information.
As per the rules, the securities are to be made public to the investors of the company but the securities are not made public. This type of transaction is prohibited by the prevailing system.
Downward and upward stock markets
The emerging market for securities refers to the gradual emergence of the market. In this type of market, along with the improvement of every sector of the economy including industry, banking, insurance, the company’s profits have gradually increased due to efficient management. At this time the share price of listed companies is higher. On the other hand, the downward market for securities refers to the downturn in the market. In this situation, the market price and market index of listed securities are on a downward trend and there is an atmosphere of frustration among investors.
Directors and Board of Directors
The people who are responsible for managing the entire business of any company, exercising their rights and fulfilling their duties are the directors of the company. The directors of the company are appointed by the founders until the first annual general meeting and then by the general meeting. In order to be the operator of any company, one has to take the shares as prescribed in the rules of that company.
Annual General Meeting
The annual general meeting of the shareholders is called by the company every year to inform the shareholders about the work done by the company during the year, achievements, problems and future plans as well as to approve the annual accounts of the company, appoint auditors and approve other important issues. According to the prevailing rules in Nepal, such a meeting has to be convened within six months of the end of each financial year.
If any shareholder is unable to attend the annual general meeting of the company in person, then any other person who has given the right to vote by signing the application in the prescribed format is called a representative. A shareholder of any company can only nominate another shareholder of the same company as a representative.