An acquisition is when one company makes a bid to acquire control of another (called the target). It can either be hostile or friendly.
These are shares which are most frequently traded (bought and sold) at the NSE, as distinguished from partly active shares in which trading is not as frequent. The shares of most leading companies are active.
An agent is an appointed representative (of a stockbroker or investment bank) who is authorized to transact the business of buying and selling shares for a commission through and on behalf of the stockbroker or investment bank.
This is a restriction placed on a buy or sell order that instructs the broker to fill the order completely by the close of the market or the order should not take place.
This is the document issued by a company to its investors showing the number and value of shares allotted to the applicant after successful subscription.
This is when two companies, previously independent of one another, combine to form a new company.
A publication issued by a company to its shareholders at the company’s fiscal year-end. The document typically includes financial statements, reports on operations, the auditor’s report and other relevant information on the company. It is mandatory for all public companies.
This is a mandatory meeting held once a year by all public companies. The directors of the company report to the shareholders on the year’s performance and future of the company. All shareholders are invited and allowed to ask questions. Notice of such a meeting is mandatory.
This is a document describing the purpose, place of business and details of a company. Every incorporated company in Kenya by law must have and submit this document to the registrar of companies and work by what it stipulates. The articles of association together with the memorandum of association form the constitution of a company.
It is also known as the offer price. It is the lowest price which a seller is willing to accept for a security. It also typically stipulates the amount of the security the seller is willing to sell.
This is anything owned by a company that has a market value. This includes land, buildings, equipment, furniture, cash, bank deposits, manufactured goods ready to be sold, goodwill, trademarks etc.
This is an instruction from a client to a broker authorizing the broker to use his discretion and try to execute an order at the best possible prize.
This is the total number of shares that a company is permitted to issue according to its memorandum and articles of association. This number can only be increased if a resolution is passed to that effect by the majority of the shareholders and an application made to the registrar of companies.
The authorized share capital is calculated by multiplying the nominal share value with the total number of authorized shares. This is stated in the memorandum and articles of association as required by law.
This is the online trading system software used at the Nairobi Securities Exchange to effect all trading transactions. It can be accessed through the NSE trading floor (through the Local Area Network) or from the stockbrokers’ offices (through the Wide Area Network). It is completely controlled and managed by the NSE.
Buying more shares in a company at a price that is lower than the price paid for the initial investment. The aim of averaging down is to reduce the average cost per share bought.
Code of Ethics
This means within the day. It is often used to refer to the price movements of a stock within a single trading session. Example; when a stock reaches a new intraday high, it means that it is trading at a new high price, relative of all other prices it has traded at during the day..
This is an offer to purchase shares in a company from the current shareholders at a price greater than the market price so as to induce them to sell. The additional amount is the premium and normally the objective is to take control of the company..
Refers to the bell which is sounded to open and close trading at the Nairobi Securities Exchange Trading Floor, thus the Opening Bell and Closing Bell respectively. Since the NSE went fully electronic by automating trading on September 22 2006, the Bell is rang on special occasions such as during the listing and commencement in the trading of a new security..
Cyclical Shares are the shares of a company which is particularly sensitive to changes in the economic conditions. Such shares will rise and fall in price depending on various factors like the state of the national economy e.g. cement, the international economy e.g. tourism or even natural phenomena e.g. fertilizers..
This is a condition in which the returns on an investment are greater than the cost of financing it. Example; if you were to borrow KES 100,000 at an interest rate of 10% and invest the same in a bond paying 12%, then there is a positive carry..