Glossary

A

Announcement

An announcement is information provided by the issuer of a security to the Stock Exchange. An announcement can take any form and be on any subject. An example of an announcement is a profit report.

ASX

Australian Stock Exchange.

At Limit

At the best price available subject to such limit.

At Current Buy/Sell Price

Previously referred to as "At Market".

If you tick the "At current" checkbox when placing an order to buy or sell, you are prepared to accept the current Buy or Sell price in the market. When buying shares, you are buying from a seller and therefore accepting no more than the Sell price. When selling shares you are selling to a buyer and therefore accepting no less than the Buy price.

Please note that we do not guarantee full execution of the order "At Current Buy/Sell" price. The price specified is the price at which your order will enter the market. In the case of a highly traded stock, the quantity of your order at the Current Buy/Sell price will often trade immediately, depending on the size of the order. However in the case of a stock with low liquidity or which trades sporadically, the outstanding balance of the order may remain untraded for some time. In this situation you would then be required to modify the order.

AUD

A currency abbreviation for Australian Dollar.

B

Bear Market: A falling Market.
Beta: The level of price volatility compared to the benchmark index. If a stock has a beta of more than one, its price is more volatile than the market average. If it has a beta of less than one, its price is less volatile than the market average. Price volatility contributes to risk.
Bid: Also known as the Buy Quote, the highest price any buyer in the market is willing to pay for the security.
Bond: Medium to long-term debt securities that pay a regular coupon and are redeemed at face value at a fixed maturity date.
Bonus Issue: The issue of shares to existing shareholders on a pro rata or equal basis i.e. a ratio such as 1:5 being one new share for every five held. No payment is required for these shares.
Brokerage: Charges made by a broker acting as an agent in the buying and selling of shares, usually based on the value of the transaction.
Bull Market: A rising Market.
Buy Quote: Also known as the Bid, the highest price any buyer in the market is willing to pay for the security.

C

Capital Adjustment

This is where price data is adjusted for Capital Reconstructions. Capital reconstructions involve a change in the capital base of a company. There are two types of capital reconstruction - splits and consolidations. The basic principle of splits is easy to understand. A company 'splits' its capital base, e.g. a company may split its capital base from 50,000,000 shares to 100,000,000 shares by issuing 2 new shares for every 1 share held. Consolidations are the opposite of splits. For example, a company may consolidate its 100,000,000 ordinary shares into 50,000,000 by giving shareholders 1 new share for every 2 shares held. Capital reconstructions may or may not include a return of capital.

Capital Index

Capital indices reflect increases or decreases of the market value based on the price of shares.

Capital Notes

Also known as Corporate Bonds, a fixed cashflow security issued by a company. The holder receives coupon payments quoted as a percentage of the Face value, usually paid in semi annual instalments. Usually in terms of trading it is quoted by expressing the coupon yield as a percentage of the trade price.

Change Price

The difference between the last trade today and yesterdays close. It is calculated by subtracting the last, on market, trade price from the OAP.

Common Shareholder Number (CSN)

A CSN is 9 digits long and begins with the number '3'.

A CSN is unique to the shareholder and is the number that all of their NZX shares are registered to.

All correspondence about your CSN and your registered NZX shareholdings will be sent to you by the New Zealand share registries via mail.

Condition codes

Condition codes apply to the Course of Trade display available on the depth view and denote any unusual trades. Note that some conditions may not apply to all Exchanges.

The following details the various conditions for NZX trades:

International
Late Reported
Overseas
Market Trade (too small for price setting)
Portfolio Marriage
Off Market
Short Sell
Weighted Average
Extra-ordinary

The following details the various conditions for ASX trades:

Transaction Types

ASX match facility trade
Buy back
Booking purpose only
Book value switch
Buy write
Board broker sale
Combination trade
Standard combination trade
Centre Point
Direct reporting
Exercise of Call
Exercise of Put
Loan
Loan return
Permitted Trade During Pre-Trading Hours Period
Prompt re-booking
Prompt Sale
Put through
Interstate Accounting

Time or Location

Late
Overnight
Overseas

Delivery

Delivery of a future
Forward delivery
Overseas delivery
Overseas resident
Blocked from transaction netting

Market Information Only

Market Information

Crossing/Special

Crossed trades
Index replicating special crossing
Special sale
Contingent special
Special sale portfolio
Other special sale
Special crossing sale

Consensus (Reuters)

The overall consensus opinion from contributing research analysts.

Contract Note

Document sent by a broker to their client confirming a purchase or sale showing details of price, brokerage and any other charges involved.

Contributing Shares

Also known as Partly Paid or Contributing Shares, is a security with an attached obligation to pay a fixed price for a fully paid ordinary share at a specified date in the future. It may or may not have entitlements such as dividends attached to it.

Convertible note

A loan made to a company with a fixed rate of interest where the holder has the right at maturity to take either a known cash amount or a known quantity of shares.

Corporate Bonds

Coupon

This is the fixed rate of interest the issuer will pay on the face value of the bond/Capital note.

Coupons Per Year

The number of interest payments made in a year. Typically there are two payments made each year but there can be more.

Cum

Has attached the applicable entitlement e.g. cum dividend. Quoted Cum from the time of the announcement until the Ex date. See also Ex (Antonym).

D

Discounted Cashflow valuation ('DCF')

ShareClarity's auditable assessment of a company's value based on a ten-year discounted cashflow valuation methodology, originated and updated by our ShareClarity's team of experienced analysts.

Deferred Delivery

Basis on which securities may be traded where the seller does not hold the shares at the time of sale, sometimes applicable in the case of a new issue of securities resulting in the buyer not receiving the shares immediately and the seller not receiving payment immediately.

Delayed

When (delayed) is displayed alongside the market date, the information is delayed 20 minutes.

Dividend

Shareholders funds distributed to shareholders. Dividend per share is the total dividend to be paid divided by the number of shares on issue.

Dividend Imputation

New Zealand has a system of dividend Imputation. Where a company has paid tax on its profits, the dividends of that company will carry a tax credit (imputation credit), which entitles shareholders to a rebate or reduction in the net amount of tax to pay.

When a company attaches imputation credits, the dividends are referred to as being imputed. Depending on the tax status of the company, dividends are either fully, partially or not imputed.

Dividend Yield

This figure tells you how much your shares would earn over a year, expressed as a percentage. Dividend yield is calculated by:

Total dividend per share divided by current market price of a share x 100

The dividend yield changes as the share price varies, meaning it rises as the price falls and vice versa. The dividend value used is usually historical, but may be forecast.

E

Equities: Another word for shares, which represent part ownership in a company (or a share in a company's "equity").
EPS: Earnings per share is derived by dividing the Full Year Profit by the number of shares on issue. The currency of the earnings per share is the same currency of the full year profit. This information is retrieved directly from the Stock Exchange.
Ex: Does not have attached the applicable entitlement e.g. Ex dividend. Securities are quoted Ex before the record date. See also Cum (Antonym).
Ex Date: The first day of a security being quoted Ex.
Exchange: Market place where securities are quoted and traded. e.g. New Zealand Stock Exchange (NZX); Australian Stock Exchange (ASX).
Expiration: This is the maximum duration of the order. Direct Broking will hold this order on its books at longest until the order has expired as specified by you.

F

Face Value: This represents the nominal value of the security you wish to purchase: i.e. $100,000.
FASTER: Fully Automated Screen Trading & Electronic Registration.
FIN: FASTER Identification Number - Used together with the Holder number to confirm Shareholder identification.
Full Year Profit: This is the sum of the two latest half year profit announcements. Full year profit only applies to equities. The currency for the profit value is included in ( ) following the profit figure. It is possible that this figure can be in a currency other than NZD. This information is retrieved directly from the Stock Exchange.
First: The first On Market trade of the day.
Float: The issue of new securities to investors.

G

Value-gap: The proportional difference between a company’s share price and Shareclarity's DCF valuation. Investors generally look for companies with positive value-gaps as it suggests they are undervalued by the market.
Government stock: Similar to Corporate Bonds except that they are issued by the Government as a lower risk fixed cashflow security.
Gross Index: Gross indices are adjusted to account for dividends paid out by the companies in the index as well as changes in the share price. This gives a better measure of the total return on shares.

H

High: The highest On Market trade of the day.
HIN - Holder Identification Number: A 'HIN' is similar to New Zealand's CSN (Common Shareholder Number).

I

Imputation credit: See dividend imputation.
Index: Numerical representation total of weighted component values for the purpose of measuring change as a broad movement over a range of securities.
Instalment Receipt: Also known as a contributing share, is a security with an attached obligation to pay a fixed price for a fully paid ordinary share at a specified date in the future. It may or may not have entitlements such as dividends attached to it.
Investment Statement: Document issued by the issuer of new securities stating the terms of the issue.
Issuer: A Company that has one or more securities listed on the Stock Exchange.
Issuer Code: Stock Exchange generated Issuing Company identification code.

J

K

L

Last Trade: The most recent on market trade in cents. When a time is displayed alongside the last trade price, this is the time the security was last traded.
Limit: See Price Limit.
Low: The lowest On Market trade of the day in cents.
LT Revenue Growth (Reuters): The mean consensus prediction of long term (LT) annual growth.

M

Market Date: This is the NZX market date that the information displayed is valid for.
Match Price: This is the indicative auction price calculated during a market match.
Match Volume: This is the indicative match volume calculated during a market match. This volume will trade at the match price following the market match.
Maturity Date: This is the date at which the principal (face value) is repaid to you, along with the final interest payment. Sometimes called the election date with Capital Notes.
Minimum Holding: Set as per appendix 2 to the NZX Listing rules governing the quotation of shares on the Stock Exchange. Specifies the minimum number of shares which can be registered to shareholder.

N

Non Renounceable

Securities issued which cannot be traded on a secondary market.

NTA (per share)

Net Tangible Asset backing per share. This figure indicates the wind up value of a company ie. if the company ceased trading, this is how much it would be worth on a per share basis.

NTA is calculated as:

Total value of assets after liabilities and intangibles have been deducted divided by the number of shares on issue.

The higher the NTA figure, the greater the value of the company.

NZX

New Zealand Stock Exchange.

NZD

A currency abbreviation for New Zealand Dollar.

O

OAP: Opening Adjusted Price/Yield. This shows the previous market day's close adjusted for any changes in capital. For example a share split or dividend.
Off Market: Any reported trade which has not occurred by meeting the leading bid or offer quoted on the Market.
Offer: The lowest price at which someone is willing to sell their shares, also known as the Ask price.
On Market: Any trade which occurs during normal market trade where the leading bid or offer is accepted.
Options: The right to buy (call option) or sell (put option) a security at a known fixed price (exercise price) up til a known fixed time (expiry date) in the future. Can be sold prior to exercising but become worthless after the expiry date.
Ordinary Shares: Represents an equal claim on net assets after all meeting all debt and preference share obligations. Includes voting rights.

P

P/E Ratio

Price Earnings ratio. This ratio indicates the underlying value of a company. In its most simple form, the PE indicates how many years it will take for the earnings from the shares to equal to the share price.

P/E ratios are calculated as:

Current share price divided by earnings per share (dividends)

In general, a high PE ratio indicates that investors believe the company has sound growth opportunities, with relatively high quality earning and low risk, hence they are prepared to accept a lower return. However, PE ratios are only useful as a comparative tool eg. to compare the value of companies within the same industry sector, or to compare the value of a company with the overall value of a whole sector.

P/S Ratio

Price to Sales ratio. Share price divided by total sales revenue per share. Also calculated as Market Capitalisation divided by Total Revenue.

Partly Paid Shares

Also known as Instalment Receipts, is a security with an attached obligation to pay a fixed price for a fully paid ordinary share at a specified date in the future. It may or may not have entitlements such as dividends attached to it.

Preference Shares

Ranks above Ordinary Shares. Dividends are usually fixed and are rarely reduced or missed. Holders may not have any voting rights. Often valued as a fixed interest security.

Price Limit

When placing an order, this is the price you are not willing to pay more than if buying or receive less than if selling. Direct Broking will accept the best price available if it is within or equal to, your specified Price Limit.

Prospectus

Document issued by the issuer of new securities stating the terms of the issue. More detailed than an Investment Statement.

Q

Quotes

The prices at which investors offer to buy and sell shares to each other. NZX Advisors enter these quotes into the NZX trading system and when they match, a market price is established and the shares traded. Final "buy" and "sell" quotes for each trading day are useful information for investors contemplating the next session.

Quote Bases

Quote Bases denote the trading status of the selected security.

Call Due (ASX)
Call Pending (NZX)
NZ Alternative Market
Cum Bonus
Cum Capital Return
Cum Dividend
Cum Entitlement
Cum Takeover Offer
Cum Interest
Conditional
Cum Right of Conversion
Call Paid
Cum Rights
Delayed Delivery
Non Faster
Notice Pending
Notice Received
Non Standard
Offer Closing
Protection Available
Protection Unavailable
Reconstructed
Reconstruction Pending
Ex-Bonus
Ex-Return of Capital
Ex-Dividend
Ex-Entitlement
Ex-Takeover Offer
Ex-Interest
Ex-Right of Conversion
Ex-Equal Access Scheme
Ex-Rights
Conditional Delayed Delivery
Ex-Priority

R

Record Date: Also known as the 'Books Closing Date', this is the day on which all shareholders on the register before the Ex date on that day will receive the applicable entitlement e.g. dividend or rights issue. The Record Date occurs after the Ex Date.
Registry: Organisation which maintains relationships with and keeps records of shareholders on behalf of the company.
Rights Issue: Also known as a Cash Issue, a method companies use for raising extra capital. Options to buy more shares usually at a price below the current Market price are distributed to existing shareholders on a pro rata or equal basis e.g. the right to buy one new share for every five held. Usually if the shareholder does not wish to buy the extra shares they can sell the rights (unless Non Renounceable) to other investors.
ROE: Return on Equity. Net Company Profits as a percentage of shareholder equity.
ROI: Return on Investment. Net Company Profits as a percentage of average capital.

S

Scrip: A holding in securities.
Security Code: Stock Exchange generated listed security identification code.
Sell Quote: The lowest price any seller in the market is willing to accept for the security.
Settlement Date: This is the date at which we must receive funds so we can then forward payment to the vendor.
Shareholder Number: Registry number which is unique to each holder on the register.
Shares Out: See Total Issue.
SRN: Security holder Reference Number. This number is the unique identifier used by Australian share registries to identify a shareholding. It is the Australian equivalent of the New Zealand Shareholder Number.
Stag: The buying of new securities at the time they are floated to sell immediately on issue.

T

Total Issue: The total number of shares on issue for the security.
Trade Fee: Fixed transaction charge.
Trades: The number of individual trades of a security. This includes on market and off market trades.
Trigger When Price: This is the price which will action your order once the last trade has either equalled this price, exceeded if buying or fallen past if selling.

U

Underwriter

Guarantor of the issue of new securities. Promises to buy any securities not taken up by other investors at the time of floating.

Unlisted Securities

Securities which do not meet the listing requirements of the NZX may be quoted and traded on the secondary board known as the Unlisted Securities Facility.

The unlisted market is a secondary market operated by the New Zealand Stock Exchange on which small to medium sized companies are traded.

The NZX does not guarantee any transactions that occur on the unlisted market nor place any capital requirements on the companies listed. Its only role is to provide a market where buyers and sellers can meet and trades can be reported.

V

Value Traded: This is the total dollar value of all trading in a security for the market day. It is calculated by multiplying the volume traded by the average sale price.
Volume Traded: The number of units traded for the market day.
VWAP: The Volume Weighted Average Price represents the average price a security trades at over the market date by total volume at each price.

W

Warrants: An option usually issued by an investment bank or body other than the underlying Company.

X

Y

Yield: "Yield to maturity" is the return you will receive, relative to the amount you have invested until the bond matures. This is different to debentures that pay a fixed rate of interest or bank related fixed term investments. As bonds and capital notes are priced directly by market forces, their yield changes on an almost constant basis, like shares. If interest rates increase above the coupon amount, then for the bond to equal market return, the capital value of the bond will decrease. The opposite is also true, if interest rates decrease below the coupon amount, the principal amount of the bond will increase. At all times, remember that yield is the effective rate of return per annum on the paid value of the bond until maturity.
Yield Limit: When placing an order for a Fixed Interest security that is traded on yield, this is the lowest yield you are willing to accept if buying, or highest yield if you are selling. Direct Broking will accept the best yield available if it is within or equal to, your specified Yield Limit.