Education
Composite Index
A composite index measures all common stocks listed on a given Exchange and any subgroup indices - that are a part of this index. The index tracks the change in market value of the exchange's common stocks, adjusted to eliminate the effects of new listings and de-listings. The market value of each stock is calculated by multiplying its price per share by the number of shares listed.
The composite index is a fairly good indicator of general market strength.
Consumer Price Index (CPI)
The Consumer Price Index (CPI) is considered the most widely used measure of inflation and is regarded as an indicator of the effectiveness of government policy.
The CPI is a basket of consumer goods (and services) tracked from month to month (excluding taxes). It is one of the most followed economic indicators and considered to be a big market mover. A rising CPI indicates inflation, a large increase is something financial markets don't like to hear. Inflation is the rate at which the general price for goods and services is rising, and subsequently our purchasing power is falling. As inflation rises this means that every dollar you own will buy a smaller percentage of a good or service.
Company Registrar
In addition to retaining the cancelled certificates and instructions presented for transfer, the transfer agent is responsible for maintaining a current record of all the owners of the company's securities. When they are performing this additional role, they are acting in the capacity of company registrars.
D
Debt/Service Ratio
This is a country’s total debt obligations expressed as a percentage of its Gross Domestic Product (GDP).
It measures how much of each dollar earned goes toward paying off the national debt.
Dividend Yield
A stock’s dividend yield is its annual dividends per share divided by price per share. The dividend yield plus capital gains percentage equals total return
The dividend yield is an indication of the income generated by a share of stock.
E
Earnings Per Share (EPS)
EPS = Net Income – Dividends on Preferred Stock divided by Average Outstanding Shares
The earnings per share indicates the profitability of a company.
A company’s earnings per share is its net income for a specific period divided by the number of outstanding shares. Companies usually use a weighted average number of shares outstanding over reporting term.
The diluted EPS means that the outstanding shares include any convertibles or warrants outstanding.
If the company issues more shares then EPS are much harder to compare to previous years.
G
Gross Domestic Product (GDP)
Gross domestic product is the monetary value of all the goods and services produced by an economy over a specified period. It includes consumption, government purchases, investments, and exports minus imports.
This is perhaps the greatest indicator of the economic health of a country. It is usually measured yearly, although monthly statistics are also released.
The nominal GDP (GDP Nominal) is unadjusted for inflation, and it gives a less realistic picture of a country’s economic health, than the real GDP, which is adjusted for inflation.
Gross Domestic Product (GDP) Per Capita
Is the total GDP divided by the number of people in the population. It is used as a measure of the average wealth of the nation is useful for comparing the wealth of different countries, regardless of their population size.
I
Immobilization
To convert share certificated of stocks from paper form to electronic registered from by depositing them on an electronic securities depositary such as the JCSD. This is a requirement to be able to trade shares on the JSE.
Issued Shares
Issued shares refers to the number of shares that are currently owned by investors. This includes restricted shares (shares owned by the company's officers and insiders) and shares held by the public. Shares that the company has repurchased are not considered outstanding stock.
This number is more important than the authorized shares or float because it is used in the calculation of many metrics including market capitalization and earnings per share (EPS).
These shares are also known as "outstanding shares" or "issued and outstanding".
J
JSE
JSE is the acronym for the Jamaica Stock Exchange.
JCSD
JCSD is the acronym for the Jamaica Central Securities Depositary.
L
Last Price
The last price refers to the last price at which a security traded at the most recent trading session.
M
Market Capitalization
Market Capitalization is the total dollar value of all outstanding shares. It is calculated by multiplying the number of shares times the current market price.
It is sometimes called market cap and is a measure of a company's size.
N
Net Income
Net income is the company's total earnings, reflecting revenues adjusted for costs of doing business, depreciation, interest, taxes and other expenses.
Net income is often referred to as "the bottom line" of a company.
P
Price/Earnings Ratio
P/E Ratio is the Market Value per Share divided by the Earnings per share (EPS)
The price to earnings ratio compares the current stock price of a company with its earnings to see if a stock is over or under valued.
It is calculated by dividing the stock's current price by the company's current annual earnings per share, usually from the last four quarters (the trailing P/E ratio), but sometimes from the estimates of the earnings expected in the next four quarters (the projected P/E ratio). Sometimes it even can consist of the sum of earnings over the last two actual quarters and the estimates of the next two quarters.
The idea behind the P/E Ratio is that it is an expectation of the company's performance in the future. A company with a P/E higher than the market or industry average means the market is expecting big things over the next few months or years.
It is useful to compare the P/E ratios of other companies in the same industry, or to the market in general, or against the company's own historical P/E Ratios.
The P/E ratio is also sometimes referred to as the “multiple”.
R
Revenues
Revenue means the dollar amount of annual sales, including discounts and returned merchandise. It is the "top line" figure from which costs are subtracted to determine net income.
When evaluating stocks, revenue growth is often an indication of how healthy a company is.
S
Sector
A sector is a particular group of securities that are in the same industry.
It is common for analysts to specialize on certain sectors. For example, at a large research firms an analyst may cover only electronics companies.
Many mutual funds also specialize by sector, a practice known as sector investing.
Share Volume
Share volume refers to the number of shares or contracts traded in a security or an entire market during a given period.
Typically a large increase in volume means that some sort of news is coming out.
T
Trading Frequency
The trading frequency measures the trading activity on a particular security during a given period. Typically it gives a measure of how easily an asset can be converted to cash in the market. If there is a large number of buyers and sellers and trading activity, it will provide high liquidity for this stock.
For example, a trading frequency of 95% suggests that over the time period under review, the stock traded in 95% of the trading sessions.
Treasury Bill Yield (T-Bill Yield)
The amount of interest paid on a treasury bill divided by the price, used as a measure of the income generated by treasury bills.
It is generally the rate of return on a six-month treasury bill usually expressed as an annual percentage rate.
Transfer agent
The primary function of the transfer agent is to control the issuance and cancellation of certificates of a particular corporation. This is done by using blank certificates designed by the company, which are maintained and controlled on the agent's premises.
Transfer form
The general rule for transferring stock certificates out of a holder's name is: the certificate must be endorsed on the legal instruction form provided (called the transfer form) exactly as the owner's name appear on the face of the certificate.
In cases where it is not possible for the registered owner(s) to perfom this function, documentation must be provided by the owner of the certificate, which could authorize the acceptance of a signature by both the stockbroker and the transfer agent.
Transferor
A transferor is the owner of the stock who is transferring his/her ownership of the securities.
This might be because the person wishes to sell the securities or it might be in satisfaction of legal requirements such as in the case of estates.
