List of Glossary Terms
The PDSnet Glossary of Terms contains definitions and explanations for over 2600 financial market terms. These definitions are constantly kept up-to-date with current topical examples from the markets. They are also updated for changes in legislation and current events like COVID19 and the July 2021 civil unrest.
The terms in the Glossary are directly linked to all PDSnet articles, confidential reports, lecture modules and other material. This means that a client reading one of our publications can immediately see which terms are defined in the Glossary and click through to read the definition. Terms within the definitions in the glossary are similarly linked, which gives the Glossary an enormous educational depth share market investors.
| C.A. |
A member of the South African Institute of Chartered Accountants (SAICA). A chartered accountant (CA) is a person who has passed his bachelors degree (usually... read more |
| CA |
A member of the South African Institute of Chartered Accountants (SAICA). A chartered accountant (CA) is a person who has passed his bachelors degree (usually... read more |
| CAC INDEX |
The Cotation Assistee en Continu is an index of the 40 largest shares trading on the Paris stock exchange, now known as the Euronext Paris.... read more |
| CAC40 |
The trading system used in the 1980's and 1990's by the Paris Bourse in France. This system gave way to the Nouveau Systeme de Cotation (NSC) in 2000, but the... read more |
| CALL ACCOUNT |
An account with a bank where the funds on deposit can be withdrawn immediately without notice. Call accounts typically attract a lower rate of interest... read more |
| CALL OPTION |
The purchased right to buy (call) specified securities at a specified price (strike price) within a specified period (American) or on a specified... read more |
| CALL WARRANT |
This is a securities contract which gives the holder the right to purchase a specified quantity of a company's shares on or before a specific... read more |
| CALMAR RATIO |
The average rate of return for the last 36 months divided by the maximum drawdown for the same period. It is usually calculated on a monthly... read more |
| CANCEL ORDER |
To abort a pending or working order. Occasionally, a trader may attempt to cancel an order that has already been executed but not yet reported as... read more |
| CANDLE VOLUME |
This is a variation of standard candle stick charts whereby the width of the candle reflects the volume traded on that particular day.... read more |
| CANDLE VOLUME CHART |
A candlestick chart where the width of the candles is determined by the volume traded during the day. Obviously this leads to an irregular... read more |
| CANDLESTICK |
An individual display of the high, low, open and close of a specific security over a period of time. A candlestick chart... read more |
| CANDLESTICK BODY |
In candlestick charting, the body of the candle is drawn between the opening price and the closing price and is coloured... read more |
| CANDLESTICK CHARTING |
A charting method which offers an alternative to the bar chart method of displaying daily weekly or monthly data. This method originated in Japan.... read more |
| CAP ISSUE |
Also called "bonus issues", these do not involve transfer of cash between the company and its members. They occur when a company feels it desirable... read more |
| CAPE TOWN STOCK EXCHANGE |
Previously the 4 Africa Exchange (4AX), the Cape Town Stock Exchange began operations as a South African stock exchange in March 2017. To differentiate... read more |
| CAPESIZE SHIP |
A ship which is too large to pass through the Suez or Panama Canals and so has move from one ocean to another by going around Cape Town in South Africa or ... read more |
| CAPEX |
An abbreviation for capital expenditure. It is often used when referring to gold mines. It refers to expenditure of a capital nature - in other words, used... read more |
| CAPITAL |
Money which is used to supply working capital or to purchase capital goods, which are to be used to generate the income of the company. Capital... read more |
| CAPITAL ACCOUNT |
An element of the Balance of Payments (BOP) which shows the movement of capital into and out of a country. For example, it shows overseas investors... read more |
| CAPITAL ADEQUACY RATIO |
The Reserve Bank's capital requirement for commercial banks set in terms of their risk weighted assets (RWA). The bank's RWA is made up of... read more |
| CAPITAL ALLOWANCE |
A capital allowance enables a company to deduct a portion of any capital cost which they may have incurred during the tax year for... read more |
| CAPITAL BASE |
This is the capital which the private investor has available for investment. This can include the equity in your house, your stock market... read more |
| CAPITAL EMPLOYED |
An out-dated term referring to the liabilities side of the balance sheet. |
| CAPITAL FLOWS |
The movement of capital into and out of a country as shown in the capital account of their balance of payments. In any financial period there... read more |
| CAPITAL GAIN |
A profit made because an investment is sold for more than its purchase price. The term "capital gain" should not be confused with the definition of Capital... read more |
| CAPITAL GAINS DISTRIBUTION |
A distribution to investment company shareholders from net long-term capital gains realised by a regulated investment company on the... read more |
| CAPITAL GAINS TAX |
A tax levied on the sale of an asset at a profit. For example, if you buy a piece of land and then later sell it for R100 000 more than you paid... read more |
| CAPITAL INTENSIVE |
A term which describes those businesses which use huge amounts of capital to make a profit. Maybe they have plant, machinery and land tied up in... read more |
| CAPITAL LOSS |
Losses incurred when capital assets are sold for a price which is lower than the original purchase price. |
| CAPITAL MARKETS |
A broad term which incorporates any market where capital is raised. Mostly this means either the stock market or the bond market. Capital... read more |
| CAPITAL PRESERVATION |
A policy of keeping the cash which a business has in the company rather than paying it out in the form of dividends or using it for capital... read more |
| CAPITAL REDUCTION |
This is an unusual corporate action which involves the return to the shareholders of a company of part of the capital which they contributed... read more |
| CAPITAL STRUCTURE |
This is the way in which a company has raised the capital needed to establish and expand its business activities or, more specifically, the number... read more |
| CAPITALISATION ISSUE |
Also called "bonus issues", these do not involve transfer of cash between the company and its members. They occur when a company feels it desirable... read more |
| CAPITALISING LOANS/INTEREST |
This is the process when loans or interest payable are converted to capital. This alters the gearing or borrowing ratio of the... read more |
| CAPITALISM |
A socio-economic system in which the factors of production are substantially controlled by the private sector rather than the government. Adam Smith... read more |
| CAPITALIST |
A socio-economic system in which the factors of production are substantially controlled by the private sector rather than the government. Adam Smith... read more |
| CAPITALIZE |
This refers to the conversion of an expense from the income statement into an asset on the balance sheet. This is one of the... read more |
| CAPITULATION |
This is a charting term which refers to the lowest point in a bear trend. It is the point where even the most optimistic of the bulls... read more |
| CAPPED INDEX |
An index where the influence of components of the index is limited to a specific percentage of the total. For example, the JSE Top 40 index has a... read more |
| CARBON CREDIT |
The is a policy established in terms of the Carbon Tax Act (15 of 2019) in terms of which taxpaters who are subject to carbon tax may make use of certain allowances... read more |
| CARBON DIOXIDE TAXATION |
A tax introduced by President Cyril Ramaphosa from 1st June 2020 in terms of the Carbon Tax Act (15 of 2019). In terms of this Act, companies will be taxed... read more |
| CARBON FOOTPRINT |
The amount of greenhouse gas (GBG) emissions (particularly carbon) put into the air by a person, company or other organisation. Your carbon footprint... read more |
| CARBON IN LEACH |
A technique whereby cyanide leaching and granulated activated carbon are used to absorb precious metals. The "loaded" carbon is then separated and the gold... read more |
| CARBON NEUTRALITY |
This means achieving a position of zero net emissions of greenhouse gases (GHG) by off-setting emissions with carbon credits or by carbon removal. Some... read more |
| CARBON OFFSET |
The is a policy established in terms of the Carbon Tax Act (15 of 2019) in terms of which taxpaters who are subject to carbon tax may make use of certain allowances... read more |
| CARBON TAX |
A tax introduced by President Cyril Ramaphosa from 1st June 2020 in terms of the Carbon Tax Act (15 of 2019). In terms of this Act, companies will be taxed... read more |
| CARRY TRADE |
The movement of cash from a low interest country or area to a high interest country. Emerging economies typically have considerably higher interest... read more |
| CARRYING BROKER |
A member of a futures exchange, usually a clearing house member, through which another firm, broker or customer chooses to clear all or some... read more |
| CARRYING CHARGE |
The cost of storing a physical commodity, such as grain or metals, over a period of time. The carrying charge includes insurance, storage and interest... read more |
| CARTEL |
A group of companies that together have a sufficiently large share of a particular product or industry so that they can force prices up by not competing... read more |
| CASH |
A balance sheet asset which appears among the current assets as "Cash and Bank Balances" . Cash is part of the company's working capital... read more |
| CASH ASSET |
A company which has cash or near-cash as its only asset. Besides the income derived from investing this cash, these companies... read more |
| CASH COMMODITY |
The actual physical commodity as distinguished from the futures contract based on the physical commodity. Also referred to as Actuals. |
| CASH CONVERSION RATIO |
The ratio of operating cash flow to EBITDA (earnings before interest, taxation, depreciation and amortisation).... read more |
| CASH EQUIVALENT |
Money held in various accounts by a company where it can only be liquidated after a delay. Thus the money in the company's bank account is immediately... read more |
| CASH FLOW |
This is the amount of cash coming into a company less the amount going out. Cash flow is important because a profitable company can... read more |
| CASH MARKET |
A place where people buy and sell the actual commodities (i.e., grain elevator, bank, etc.) also often known as a "spot market" to distinguish... read more |
| CASH RATIO |
An accounting ratio used to determine whether a company's current assets excluding its stock (i.e. just its debtors' book... read more |
| CASH SETTLEMENT |
A method of settling certain futures or options contracts whereby the market participants settle in cash (rather than delivery of the... read more |
| CASUS FORTUITUS |
In law this refers to an unpredictable event which prevents one party from completing its obligations in terms of a contract. Most major contracts contain a force... read more |
| CATAPULT FORMATION |
A formation usually associated with point & figure charting where the chart makes a triple top, breaks above that top and then... read more |
| CAUTIONARY ANNOUNCEMENT |
This is a publicly advertised announcement made by a listed company to urge shareholders to exercise caution when trading in its shares.... read more |
| CBI |
Contingent business interruption (CBI) is a type of business insurance that covers a business against the interruption of its business by a disaster. The business... read more |
| CBOT |
Chicago Board of Trade. The CBOT is a global commodity futures exchange trading treasury bonds, corn, soybean, wheat, mini-sized Dow,... read more |
| CENSURE |
The JSE has very strict rules about what listed companies can and cannot do. If these rules are ignored or broken the JSE sometimes issues... read more |
| CENTRAL BANK |
A government or quasi-governmental organization that manages a country's monetary policy. For example, the U.S. central bank is the Federal Reserve, and... read more |
| CENTRAL ENERGY FUND (CEF) |
This is a state-owned and controlled company established in terms of the Central Energy Fund Act (38 of 1977) which was originally established by the National... read more |
| CENTRAL SECURITIES DEPOSITORY |
The role of a central depository is to maintain records of all purchases and sales of securities on organised exchanges within the country. In South... read more |
| CENTRAL SECURITIES DEPOSITORY PARTICIPANT |
A CSDP is a person authorised to perform custodial, administrative or settlement duties. The central securities depository (CSD) in South Africa is known... read more |
| CEO |
The leader of a company's board of directors. The CEO is in charge of and responsible for everything that happens in the company. However,... read more |
| CERTIFICATE OF DEPOSIT |
A commercial "I.O.U", usually issued by a commercial bank. It is a certificate representing a deposit usually of at least R100 000 which entitles the holder... read more |
| CERTIFICATED SECURITY |
A security which is represented by a certificate. This can be the case for equity shares in South Africa, but since dematerialisation... read more |
| CERTIFIED FINANCIAL PLANNER |
To become a certified financial planner (CFP) you must have a post-graduate qualification from one of the recognised Financial Planning Institute's (FPI) approved... read more |
| CFD |
A derivative contract that is not guaranteed by any organised exchange - which means that the counter-party risk is carried by the person... read more |
| CFO |
The Chief Financial Officer (CFO) is the senior executive responsible for managing the financial affairs of a company. The CFO's duties include tracking cash flow,... read more |
| CFTC |
A regulatory body which monitors and regulates the trading of futures contracts in America. The CFTC was established in 1974 and brought together the various... read more |
| CGT |
A tax levied on the sale of an asset at a profit. For example, if you buy a piece of land and then later sell it for R100 000 more than you paid... read more |
| CHAIKIN OSCILLATOR |
An oscillator created by subtracting a 10-day Exponential Moving Average (EMA) from a three-day EMA of the accumulation /distribution line. This... read more |
| CHAIRMAN OF THE BOARD OF DIRECTORS |
The chairman of the board of directors of a company is usually appointed by the directors. His position is in no way different from the other... read more |
| CHAIRMAN'S REPORT |
Most annual financial statements contain a Chairman's report, although this is not a requirement of the Companies Act. It is worth reading the chairman's... read more |
| CHAMBER OF MINES |
Previously known as the Chamber of Mines, this organisation represents employers in the mining industry in South Africa. Its objective is to support and promote mining in this country. It was... read more |
| CHANNEL |
A technical analysis term which refers to a period during which a data stream oscillates between upper and lower parallel channel lines. You will... read more |
| CHAPTER 9 INSTITUTIONS |
Those institutions which are established in terms of Chapter 9 of the Constitution of South Africa. There are six chapter 9 institutions - the Electoral Commission,... read more |
| CHARISMATIC LEADER |
Many companies listed on the JSE were founded or are run by a charismatic leader. The problem with this is that when that leader leaves the... read more |
| CHARLES DOW |
Charles Dow was one of the founders of Dow Jones & Co. and the originator of the famous Dow Jones indexes. He developed the "Dow Theory" of market... read more |
| CHART |
In the context of the share market, this is a display or picture of a security that plots price and/or volume (the number of shares... read more |
| CHARTERED ACCOUNTANT |
A member of the South African Institute of Chartered Accountants (SAICA). A chartered accountant (CA) is a person who has passed his bachelors degree (usually... read more |
| CHARTING |
The analysis of group investor behaviour, as reflected in the patterns of share prices and volumes, indices, exchange... read more |
| CHARTING STYLE |
The manner in which the five data points for a share are displayed in a chart. Every trading day, every share has a price for its high,... read more |
| CHARTIST |
A person who studies and makes use of patterns within the prices of shares and other securities. Technical analysis aims to develop... read more |
| CHEAP |
The meaning of the word "cheap" in the share market is not the same as it is in common parlance. When a share is regarded as cheap, then it is perceived... read more |
| CHICAGO MERCANTILE EXCHANGE |
The Chicago Mercantile Exchange (CME). The CME is the largest futures exchange in the United States and also owns and operates the largest futures... read more |
| CHIEF EXECUTIVE OFFICER |
The leader of a company's board of directors. The CEO is in charge of and responsible for everything that happens in the company. However,... read more |
| CHIEF FINANCIAL OFFICER (CFO) |
The Chief Financial Officer (CFO) is the senior executive responsible for managing the financial affairs of a company. The CFO's duties include tracking cash flow,... read more |
| CHINESE WALL |
A communications barrier between members or departments of a financial institution to prevent the transfer of price sensitive information. Chinese... read more |
| CHROME |
A hard, corrosion-resistant, brittle metal processed through a smelter into ferrochrome and used as an additive to make stainless steel. South Africa produces... read more |
| CHROMIUM |
A hard, corrosion-resistant, brittle metal processed through a smelter into ferrochrome and used as an additive to make stainless steel. South Africa produces... read more |
| CIPC |
Established by the Companies Act, this commission is responsible for registering companies in South Africa and maintaining a register of all companies.... read more |
| CIRCUIT BREAKER |
A system of limiting trading highs and price limits on equities and derivatives markets designed to provide a cooling-off... read more |
| CIS |
This Act replaces the Unit Trust Control Act and the Participation Bonds Act and it came into effect in 2003. It regulates any scheme where members of the... read more |
| CISCA |
This Act replaces the Unit Trust Control Act and the Participation Bonds Act and it came into effect in 2003. It regulates any scheme where members of the... read more |
| CIVIL UNREST |
Any substantial disturbance conducted illegally by a large group of civilians. South Africa is no stranger to civil unrest. In fact it is estimated that there... read more |
| CLAIMS RATIO |
A ratio used by the insurance industry to determine its profitability. The ratio is the total of claims as a percentage of insurance premiums earned.... read more |
| CLASS |
Some listed companies may issue a variety of different shares with different risk profiles to entice investors to support them.... read more |
| CLAW BACK CLAUSE |
This is a clause in an agreement which allows one of the parties to retrieve monies already paid under certain specific circumstances. Typically, employee contracts... read more |
| CLEAR |
The process by which a clearing house maintains records of all trades and settles margin flow on a daily marked-to-market basis for its clearing members. |
| CLEARING HOUSE |
An agency or separate corporation of a futures exchange that is responsible for settling trading accounts, collecting and maintaining margin monies, regulating delivery and reporting... read more |
| CLEARING MEMBER |
A member of an exchange clearing house responsible for the financial commitments of its customers. All trades of a non-clearing member must... read more |
| CLIMATE CHANGE |
A major shift in the earth's climate, almost certainly caused by the build-up of so-called greenhouse gases like carbon dioxide and methane. Current research... read more |
| CLOSE |
This is the price at which the last transaction of a particular share took place during the trading session being reported on. The uncrossing... read more |
| CLOSE CORPORATION |
A type of juristic person designed for use by small businesses to give them the benefits of limited liability but without the red tape and... read more |
| CLOSE OF TRADE |
When the share market stops trading at the end of each trading day. The share price at the close is what is used in all charts... read more |
| CLOSED PERIOD |
The time between the end of a company's financial year and the publication of its audited financial statements. For JSE companies,... read more |
| CLOSED TRADES |
Positions that have been either liquidated or offset. |
| CLOSED-END FUNDS |
A mutual fund that does not sell unlimited shares; one with a specific number of outstanding shares. |
| CLOSING DAY OF OFFER |
Last day on which an offer made by a company to its shareholders may be accepted (e.g. in the case of a rights offer or an offer to... read more |
| CLOSING PRICE |
This is the price at which the last transaction of a particular share took place during the trading session being reported on. The uncrossing... read more |
| CLOSING RANGE |
A range of prices at which futures transactions took place during the close of the market. |
| CLOSING STOCK |
At the end of the accounting period, stock (also called "inventory") must be valued to determine the company's "cost of sales". The... read more |
| CM42 |
The form which must be completed and signed by both the purchaser and seller of shares for a transfer of shares to take place. In practice, since shares... read more |
| CME |
The Chicago Mercantile Exchange (CME). The CME is the largest futures exchange in the United States and also owns and operates the largest futures... read more |
| COAL |
A sedimentary rock which is formed by layers of plants, mostly trees which have become compressed into seams in the rock. Coal is combustible as a fossil fuel... read more |
| CODE |
An abbreviation for securities traded on an organised exchange. Share codes on the JSE are between 3 and 6 letters long - so,... read more |
| CODE FOR RESPONSIBLE INVESTING IN SOUTH AFRICA (CRISA) |
Developed by the Institute of Directors, this code is similar to the "Principles of Responsible Investing" which is backed by the United Nations and was... read more |
| CODE OF GOOD PRACTICE |
This is a lengthy document established in terms of the Broad-Based Black Economic Empowerment Act (53 of 2003) covering such issues as the dismissal of... read more |
| COINCIDENCE |
In Gann theory, a projected reversal point. |
| COINCIDING INDICATOR |
An economic indicator that moves in the same direction as the business cycle. In other words, it turns when the economy as a whole turns, either... read more |
| COLLATERAL |
An asset of some type which is given to a lender as security for the money lent. Any asset of value can act as collateral. With property, the land... read more |
| COLLECTIBLE |
An asset which acquires value independently of its inherent value because it is collected by a sufficiently large group of collectors. Collectibles can... read more |
| COLLECTIVE BARGAINING |
The process whereby employers negotiate with organised labour on issues such as wages, conditions of employment and other benefits. Both parties have a... read more |
| COLLECTIVE INVESTMENT SCHEMES CONTROL ACT |
This Act replaces the Unit Trust Control Act and the Participation Bonds Act and it came into effect in 2003. It regulates any scheme where members of the... read more |
| COLLUSION |
This term is normally used in conjuction with the competition authorities, one of whose functions is to prevent price collusion between companies.... read more |
| COLOCATION |
The JSE offers a colocation facility for those companies that want to use program trading to extract very small profits from arbitrage... read more |
| COMBINED FORECAST |
The weighted average of two or more forecasts. |
| COMEX |
The Comex, which was previously the commodities exchange, is a division of the New York Mercantile Exchange (NYMEX). It trades futures and... read more |
| COMMERCIAL |
The commercial sector includes all companies that are involved in the production, processing, or retailing of products and services.... read more |
| COMMERCIALLY ACTIVE |
A term which is used to describe those unemployed people in the economy who are still actively seeking employment and have not yet succeeded in finding... read more |
| COMMERICAL BANK |
An organisation registered in terms of the Banks Act (94 of 1990). Commercial banks are deposit-taking institutions that must be registered under the Act to conduct... read more |
| COMMISSION |
A fee charged by a broker or agent to a customer for executing a transaction. |
| COMMODITY |
Basically these are raw materials such as gold, silver, soya beans, sugar, coffee, steel, etc. Many commodities (such as gold)... read more |
| COMMODITY CURRENCY |
This is a currency the strength of which is primarily determined by a or group of commodities. Typically, this can be found in third world... read more |
| COMMODITY CYCLE |
Commodity prices tend to move in cycles lasting several years. For example, the aluminium price bottomed at $1100 a ton in late 1993... read more |
| COMMODITY FUTURES TRADING COMMISSION |
A regulatory body which monitors and regulates the trading of futures contracts in America. The CFTC was established in 1974 and brought together the various... read more |
| COMMODITY POOL OPERATOR |
An individual or organisation which operates or solicits funds for a commodity pool. A CPO is generally required to be registered with the CFTC. |
| COMMODITY SHARE |
Shares of companies in the resource sector. Commodity shares are shares of those companies which manufacture, extract or sell... read more |
| COMMODITY TRADING ADVISOR |
A person who, for compensation or profit, directly or indirectly advises others as to the advisability of buying or selling futures or commodity... read more |
| COMMON STOCK |
A term used in America to describe their equivalent of ordinary shares. |
| COMPANIES ACT |
The Companies Act (71 of 2008) contains the law concerning the formation and management of companies in South Africa. It can be viewed at: |
| COMPANIES AND INTELLECTUAL PROPERTY COMMISSION |
Established by the Companies Act, this commission is responsible for registering companies in South Africa and maintaining a register of all companies.... read more |
| COMPANY |
An organisation which is registered with the Companies and Intellectual Properties Commission and incorporated in terms of the Companies Act (71... read more |
| COMPANY BUY-BACK |
The Companies Act (71 of 2008) allows a company to buy back its own shares in the open market, provided it can pass a solvency and... read more |
| COMPANY REGISTERED OFFICE |
In terms of the Companies Act (71 of 2008) every company must have a registered office. That office must be where certain records are maintained... read more |
| COMPANY REGISTRATION CERTIFICATE |
A certificate which is issued when a company is registered with the Companies and Intellectual Property Commission (CIPC). The certificate is proof... read more |
| COMPANY REGISTRATION NUMBER |
This is a 16-digit number consisting of 8 numbers followed by 2 letters and then a further 6 numbers which is given to identify each company and limited... read more |
| COMPANY SECRETARY |
In terms of section 86 of the Companies Act (71 of 2008), public or state-owned companies must appoint a company secretary who must be a permanent... read more |
| COMPANY TAX |
In South Africa, company tax is 27% of a company's taxable income. Taxable income is the total of a company's incomes less all its deductible... read more |
| COMPANY WEBSITE |
These are an immensely valuable source of information for private investors. Almost every listed company maintains a website on which it posts... read more |
| COMPARABLE PERIOD |
The previous equivalent financial period with which the current periods figures are comparable. For example, a company's headline earnings per share... read more |
| COMPARATIVE FINANCIALS |
The Companies Act (71 of 2008) requires that companies provide comparative figures when reporting their financial results. This usually takes... read more |
| COMPARATIVE RELATIVE STRENGTH INDICATOR |
A technical indicator which compares the price movement of a stock with that of its competitors, industry group or the entire market.... read more |
| COMPENSATION COSTS |
The regular remuneration of unskilled or semi-skilled, usually blue-collar workers in exchnage for their labour. Wages are often paid weekly or bi-weekly.... read more |
| COMPETITION |
The capitalist economic system is based on competition. Manufacturers produce a product which they perceive to be in demand and they compete with... read more |
| COMPETITION ACT |
This Act sets up the Competition Tribunal, Appeal Court and Commission. Together these three organisations prosecute breaches of the Act and require notification... read more |
| COMPETITION TRIBUNAL |
The Competition Tribunal is established in terms of section 26 of the Competition Act (89 of 1998) to hear and decide on competition cases prepared by the... read more |
| COMPETITIVENESS RANKING |
The global competitiveness index (GCI) is prepared by the World Economic Forum (WEF) annually and it ranks 141 countries on how competitive they... read more |
| COMPLIANCE OFFICER |
These days, companies, and especially listed companies have a host of rules and regulations that they must comply with - from the Companies Act... read more |
| COMPOUNDING |
Compounding occurs where the return from an investment is added to the original capital and then itself earns a further return which is further added... read more |
| COMPULSORY ACQUISITION |
The forced acquisition of minority shares by a majority of more than 90% of the shareholders of a company. In terms of section 124 of the... read more |
| CONCESSIONARY FINANCE |
Finance which is provided at very low interest rates or even as a donation in order to further an altruistic objective. For example, in 2020, Escom was... read more |
| CONDITIONAL OFFER |
An offer made to the shareholders of a company conditional to the occurrence of some event. Typically, where a take-over bid is being made,... read more |
| CONDITIONS PRECEDENT |
These are the conditions that must be met before a major transaction, such as the sale of a subsidiary or a take-over can take place. Typically,... read more |
| CONFIRMATION |
A charting pattern giving credibility to a formation which has taken place. Typically, it is advised to wait for at least three days... read more |
| CONFIRMATION SIGNAL |
The next candle in a candlestick formation which confirms the previous reversal signal, confirming that a change in the direction of... read more |
| CONFLICT OF INTEREST |
A situation in which an offical (either commercial or government) can derive a personal benefit from a decision which he is making or is a party to. Conflicts... read more |
| CONGESTION AREA OR PATTERN |
A series of trading days in which there is no visible progress in price either upwards or downwards. This is also known as a "sideways" market... read more |
| CONGLOMERATE |
These are massive, usually multi-national, holding companies involved in a wide variety of industries. Their size tends to make them immune to developments... read more |
| CONSENSUS FORECAST |
An average of the forecasts of a group of analysts or economists for a particular economic indicator or the profit of a particular... read more |
| CONSOLIDATION |
1. Technical analysis: where a chart moves up and down within a narrow range, bounded by a support and resistance... read more |
| CONSTRUCTION INDEX |
An economic index of activity in the construction sector prepared and produced by the economist Roelof Botha, on behalf of Afrimat, every quarter.... read more |
| CONSUMER CONFIDENCE |
In South Africa, consumer confidence is measured and published every quarter by FNB and the Bureau for Economic Research (BER). The survey includes three questions... read more |
| CONSUMER DEMAND |
This is the total of what consumers spend on goods and services for their personal use. It makes up about 60% of gross domestic product (GDP)... read more |
| CONSUMER FINANCIAL VULNERABILITY INDEX |
This is an index produced by Unisa in conjunction with Momentum which measures the ability of consumers to cope financially. The index is compiled from... read more |
| CONSUMER GOODS |
Anything which is normally bought by consumers as the end user. This differs from industrial goods, which are bought with the objective of producing some... read more |
| CONSUMER PRICE INDEX |
The measure of the degree to which the currency of a country is losing purchasing power over time through inflation. In South Africa, the... read more |
| CONSUMER SPENDING |
This is the total of what consumers spend on goods and services for their personal use. It makes up about 60% of gross domestic product (GDP)... read more |
| CONSUMPTION |
Consumption is the buying of goods and services by consumers. Private consumption expenditure by consumers accounts for about 60% of gross domestic... read more |
| CONSUMPTION EXPENDITURE |
Consumption is the buying of goods and services by consumers. Private consumption expenditure by consumers accounts for about 60% of gross domestic... read more |
| CONSUMPTION FUNCTION |
A linear function representing the realtionship between disposable income and consumer spending. The function assumes that there is a certain amount... read more |
| CONTANGO |
A futures market were prices in succeeding delivery months are progressively higher. The opposite of "backwardation". |
| CONTINGENT BUSINESS INTERRUPTION |
Contingent business interruption (CBI) is a type of business insurance that covers a business against the interruption of its business by a disaster. The business... read more |
| CONTINUATION CHART |
A derivatives chart in which the price scale for the data for the end of a given contract and the data for the beginning of the next contract are... read more |
| CONTINUATION SIGNAL |
A pattern in technical analysis which suggests that a chart is diverging slightly from it's trend however will eventually continue... read more |
| CONTINUING OPERATIONS |
Those operations which a company intends to continue with. Companies are always concerned with their focus and they tend to sell or discontinue those... read more |
| CONTRACT FOR DIFFERENCE |
A derivative contract that is not guaranteed by any organised exchange - which means that the counter-party risk is carried by the person... read more |
| CONTRACT MONTH |
The month in which delivery is to be made in accordance with the terms of the futures contract. Also referred to as Delivery Month. |
| CONTRARIAN |
An investor who believes that to beat the market you have to be right when the market is on average wrong. Contrarians delight in buying when... read more |
| CONTROL |
Section 2 of the Companies Act (71 of 2008) says, "a person controls a juristic person, or its business, if: |
| CONTROL PREMIUM |
The additional cost which an acquiring company must pay in order to obtain control of a subsidiary. This cost is incurred because control... read more |
| CONTROLLING SHAREHOLDER |
A shareholder who owns more than 50% of a company's voting share capital and can therefore control the company's activities. |
| CONVARIANCE |
Multiplies the deviation of each variable from its mean, adds those products and then divides by the number of observations. The objective is to provide... read more |
| CONVERGENCE |
When futures prices and spot prices come together at the futures expiration. Futures contracts expire at the end of each quarter - in other... read more |
| CONVERSION ARBITRAGE |
Traders buy and sell two different securities (or synthetic securities), forcing equivalent prices for equivalent securities. |
| CONVERTIBLE PREFERENCE SHARE |
This is a preference share which can be converted into an ordinary share on a specified future date. This gives a higher degree of security than... read more |
| CONVERTIBLE SECURITIES |
These are shares, debentures or other securities which are convertible either voluntarily or compulsorily into ordinary shares... read more |
| COPPER |
One of the elements with the symbol "cu". Copper is a maleable base metal which conducts electricity and heat very efficiently. It is used for most electrical... read more |
| COPPOCK CURVE |
A long-term price momentum indicator. For example, a 10-month weighted moving average of the sum of the 14-month rate of change and... read more |
| CORE BUSINESS |
The primary business of any company. You will often hear of companies selling off their non-core businesses in order to focus on their most... read more |
| CORNER |
This is when a share, which has been short -sold, falls into the hands of a few investors who are unwilling to sell and who thus cause a bear squeeze. Also where one... read more |
| CORPORATE |
Of or pertaining to a company. Thus, for example, a company's image is known as its "coporate image". Companies are juristic persons resonsible for their own debts and management... read more |
| CORPORATE ACTION |
Any action taken by a company that has a major effect on its shareholders. Corporate actions are divided into those which require the shareholder... read more |
| CORPORATE GOVERNANCE |
A set of rules and procedures which control the way in which a company is managed in the interests of its primary stakeholders including its shareholders,... read more |
| CORPORATE IMAGE |
The way in which the public perceives a company. This can be very important to the company's marketing and to its share price. Companies with... read more |
| CORPORATION |
An organisation which is registered with the Companies and Intellectual Properties Commission and incorporated in terms of the Companies Act (71... read more |
| CORRECTION |
This term is used quite loosely to mean any short-term downward change in the direction in which a share or market is moving. More strictly, it refers... read more |
| CORRECTION WAVE |
A wave or cycle of waves moving against the current impulse trend's direction. |
| CORRELATION COEFFICIENT |
This is the degree to which two continuous data streams (such as two share price graphs or currencies) are the same - i.e. the degree to which... read more |
| COST ACCOUNTANCY |
The recording and analysis of a company's costs in such a way as to improve its profitability. Cost accounting is distinguished from financial accounting.... read more |
| COST BASIS |
The cost of a given share or group of stock shares. This is used as a bench-mark to establish whether the investment is profitable or not and by... read more |
| COST OF CONTROL |
The additional cost which an acquiring company must pay in order to obtain control of a subsidiary. This cost is incurred because control... read more |
| COST OF EXTRACTION |
This is a mining term which refers to the cost extracting a metal or mineral from its ore body so that it can be sold. In South Africa, this concept is... read more |
| COST OF SALES |
An accounting measure which endeavours to measure the cost of the goods sold during the accounting period. The method is to value the inventory... read more |
| COSTS |
This is something which a company has to pay for. Companies have two types of expenses - those which go up and down with sales and those which have to be... read more |
| COTATION ASSISTEE EN CONTINU (CAC) |
The trading system used in the 1980's and 1990's by the Paris Bourse in France. This system gave way to the Nouveau Systeme de Cotation (NSC) in 2000, but the... read more |
| COUNTER |
A part-ownership of a company. The ownership of companies is divided into individual shares which, if the company is listed on the JSE, can... read more |
| COUNTER PARTY |
One of the participants in a financial transaction. This term is typically used when speaking of foreign exchange (FX) transactions. |
| COUNTER PARTY RISK |
The risk that the other party to a securities transaction will not fulfil their obligations. In other words, if you are buying and the seller will not supply... read more |
| COUNTER TREND |
A period in a price chart showing movement opposite to the direction of the prior time period. Also called a "retracement" or sometimes a "counter... read more |
| COUNTERMOVE |
A period in a price chart showing movement opposite to the direction of the prior time period. Also called a "retracement" or sometimes a "counter... read more |
| COVENANT |
An agreement reached by a company with its creditors for the repayment of principal and interest on its outstanding debts. Debt... read more |
| COVER |
Purchasing back a contract sold earlier. For example, if a share is sold short, the short seller is exposed until he buys back sufficient shares... read more |
| COVERED OPTION |
A short call option or put option position which is covered by the sale or purchase of the underlying futures contract or physical... read more |
| COVERED WRITE |
Writing a call option against a long position in the underlying security. By receiving a premium, the writer intends to realize additional... read more |
| COVID-19 |
In January of 2020, the World Health Organisation confirmed a corona virus (SARS-CoV-2) as the causative agent of coronavirus disease 2019. (COVID-19). By June... read more |
| CPI |
The measure of the degree to which the currency of a country is losing purchasing power over time through inflation. In South Africa, the... read more |
| CPI-X |
The consumer price index excluding the effect of interest rate changes. This is the number that the Reserve Bank uses in their inflation targeting.... read more |
| CPO |
An individual or organisation which operates or solicits funds for a commodity pool. A CPO is generally required to be registered with the CFTC. |
| CRASH |
A significant and sudden fall in the total market. In general, anything less than a 20% fall in the market as a whole is regarded as a correction... read more |
| CRASH |
A sudden fall in stock market prices, sometimes in a single trading day, and which is usually followed by a bear trend. This happens... read more |
| CREDIT ACTIVE |
This term is used to describe a consumer who makes use of credit in various forms. In South Africa, about 25m people are credit active - and over 40% of those... read more |
| CREDIT LOSS RATIO |
This is a banking ratio which is the total impairment losses as a percentage of total loans and advances. This shows how much the bank... read more |
| CREDITORS |
Amounts owing to the company's creditors in the balance sheet. These appear under current liabilities. These amounts are owed by the... read more |
| CRIME |
South Africa has serious levels of crime which impact individuals and companies continuously. The crimes can take the form of organised syndicates stealing... read more |
| CRISA |
Developed by the Institute of Directors, this code is similar to the "Principles of Responsible Investing" which is backed by the United Nations and was... read more |
| CRITICAL MASS |
In the share market this refers to a company's size and its ability to achieve economies of scale in its production. Smaller companies are... read more |
| CRN |
This is a 16-digit number consisting of 8 numbers followed by 2 letters and then a further 6 numbers which is given to identify each company and limited... read more |
| CROSS HOLDING |
A cross holding occurs where two closely connected companies own shares in each other. This often happens when a subsidiary company owns shares in its parent company.... read more |
| CROSS MARKETING |
Where one company or division within a group markets its products to the clients of another company or division in the group. This creates some synergies and reduces the cost of marketing.... read more |
| CROSS RATE |
The exchange rate between any two currencies that are considered non-standard in the country where the currency pair is quoted. For example, in the... read more |
| CROSSED MARKET |
Where a quoted bid price is higher than the offer price for a security. |
| CRYPTOCURRENCY |
A digital or virtual currency used as a medium of exchange using cryptography for security, transactional accuracy, creation and verification. These currencies... read more |
| CSD |
The role of a central depository is to maintain records of all purchases and sales of securities on organised exchanges within the country. In South... read more |
| CSDP |
A CSDP is a person authorised to perform custodial, administrative or settlement duties. The central securities depository (CSD) in South Africa is known... read more |
| CTA |
A person who, for compensation or profit, directly or indirectly advises others as to the advisability of buying or selling futures or commodity... read more |
| CTSE |
Previously the 4 Africa Exchange (4AX), the Cape Town Stock Exchange began operations as a South African stock exchange in March 2017. To differentiate... read more |
| CUM DIV |
Shares are said to be "cum div" in the period between declaration of the dividend and the last day to trade. A sale of shares while they are "cum... read more |
| CUMULATIVE PREFERENCE SHARE |
A preference share accumulates its dividend in the event of the preferential dividend being passed for one or more years. Preferential dividends... read more |
| CUP AND HANDLE |
An accumulation pattern observed on bar charts. The pattern lasts from seven to 65 weeks; the cup is in the shape of a "U" and the handle... read more |
| CUP AND LIP |
An accumulation pattern observed on bar charts. The pattern lasts from seven to 65 weeks; the cup is in the shape of a "U" and the handle... read more |
| CURATORSHIP |
The safeguarding and management of the financial affairs and estate of another person because they are incapacitated by their absence or because they are incapable... read more |
| CURB |
Originally an overflow of companies that were too small to list on the New York Stock Exchange, the "Amex" or "the curb" as... read more |
| CURRENCY |
A medium of exchange used as a store of value or in the commercial exchange of value between persons or organisations. Historically, currencies were physical commodities... read more |
| CURRENCY BACKING |
A hard asset, usually gold, that is used to back a national currency. Originally when paper money was first used, these were certificates... read more |
| CURRENCY CROSS |
An exchange rate between the traded currencies of two countries. Thus the US dollar/euro, the pound/rand and the yen/dollar are all currrency crosses... read more |
| CURRENCY FUTURE |
A contract to exchange one currency for another at a specific future date (the expiration date) and at a specified rate (the exchange rate). More... read more |
| CURRENT ACCOUNT |
This is an element of the balance of payments (BOP) toegther with the capital account. It shows a country's trade in goods and services... read more |
| CURRENT ASSET |
An item on a balance sheet which includes any assets which can easily be turned into cash (have high liquidity) and which will only be held... read more |
| CURRENT LIABILITY |
Any liability that must be paid within a year from the date of the balance sheet. These are mainly amounts owed by the company, which must... read more |
| CURRENT RATIO |
The ratio of current assets to current liabilities. The objective of this ratio is to determine whether the company can meet its short-term... read more |
| CUSIP |
The number assigned by the Committee of Uniform Security Identification Procedure that appears on all securities documents. Each security is given a number... read more |
| CUSTODY AND ADMINISTRATION OF SECURITIES ACT (85 OF 1992) |
An Act which dealt with the transition from an open-outcry share market with physical share certificates to an electronic market with dematerialised... read more |
| CUSTOM DUTIES |
The tax paid on the import of foreign-made products into a country according to a specific import tariff. In general, countries try to avoid having too... read more |
| CUTOFF FREQUENCY |
A point where higher frequency cycles will not pass through a filter (e.g., a 10-day simple moving average will eliminate cycles of 20 days or less). |
| CYCLE |
Shares, industries and markets move in cycles. According to Charles Dow, there are three types of cycles: primary, secondary and daily fluctuations.... read more |
| CYCLICAL |
A cyclical share is one which is heavily impacted by the business cycle. When the economy is going through a slow growth period (a recession)... read more |
| CYCLICAL SHARES |
A cyclical share is one which is heavily impacted by the business cycle. When the economy is going through a slow growth period (a recession)... read more |