List of Glossary Terms

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z Numeric


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 a Bachelor of Commerce or Bachelor... 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 a Bachelor of Commerce or Bachelor... 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. It commenced with a base value of 1000 in 1987. It... 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 CAC40 index... 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An account with a bank where the funds on deposit can be withdrawn immediately without notice.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 than funds which require a notice... 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 date (European). By the... 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 date. Call warrants are issued... 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 basis. A negative value for the... 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 having been filled. In such a case,... 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. The greater the volume, the... 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 X-axis which can create... 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 is composed of multiple candles,... 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 either green (when the close... 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. The price range between... 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 to convert part of its reserves... 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  the Cape Horn in South America.... 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 to purchase some sort of fixed... 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 can also include the reserves... 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 investing into and disinvesting... 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 its Tier I, Tier II... 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 the purchase of plant and machinery... 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 portfolio and other... 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 will be people investing into... read more
 
CAPITAL GAIN
When a gain is made when an investment is sold for more than its purchase price, it is called a capital gain. This must not be confused with the definition of Capital Gains Tax... read more
 
CAPITAL GAINS DISTRIBUTION
 
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 for it, you will have to pay tax... 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 their production process.... 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 markets typically have a... 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 projects. Companies usually... 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 of shares and long-term... 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 to convert part of its reserves... 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 company by shifting loans... 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 proposed the concept... 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 proposed the concept... 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 "tricks" which private investors... 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 give up their optimism and sell... 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 10% "cap" which means that no single... 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 to reduce the tax which they... 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 at the rate of R120 per ton... 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 includes the burning of fossil... 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 extracted. The carbon... 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 countries have set a goal to become... 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 to reduce the tax which they... 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 at the rate of R120 per ton... 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 rates than first world... 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 trades.
 
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 on the invested funds as well... 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 with each other. An agreement is... 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 because the company... read more
 
CASH ASSET / SHELL
A company which has cash or near-cash as its only asset. Besides the income derived from investing this cash, these companies have no income-producing... 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). This ratio shows how effective... 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 availabe, but the company... 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 easily go bankrupt if its... 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 it from any futures... 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 and cash balance) is... 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 commodity). This is typical of a financial future where there... read more
 
CASH SHELL
A listed company which has cash as its only asset and conducts no business. Occasionally, a company will sell all of its assets because it can get good prices for them and then ends up with just... 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 majeure clause which allows... 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 forms a double top at a higher... 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. These announcements appear... 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 can claim an amount equal to... read more
 
CBOT
Chicago Board of Trade. The CBOT is a global commodity futures exchange trading treasury bonds, corn, soybean, wheat, mini-sized Dow, gold, silver and... 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 a public censure. Sometimes, a... 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 the ECB (European Central... 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 Party in the 1950's to create... 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 Africa, this function is performed... 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 as STRATE (Share TRAnsactions... 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, according to the Companies Act,... 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 to a rate of annual interest and the... 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 in about the year 2000, most... 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 educuation providers. There... 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 buying or selling the contract.... 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, financial... 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 for it, you will have to pay tax... 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 technical analysis tool compares... 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 directors unless he is given... 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 report, especially for... 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 often find when looking at charts... 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, the Public Protector, the... 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 company, the share price can drop... 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 movements and is regarded as one of the... 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 a Bachelor of Commerce or Bachelor... read more
 
CHARTING
The analysis of group investor behaviour, as reflected in the patterns of share prices and volumes, indices, exchange rates and other data streams. More commonly known as charting, this consists... 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, low, open and... 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 to be trading in the market... 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 Clearing House in the world.... 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, according to the Companies Act,... 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, financial... read more

 
CHINESE WALL
A communications barrier between members or departments of a financial institution to prevent the transfer of price sensitive information. Chinese walls are imaginary but are taken... 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 about 60% of the world's... 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 about 60% of the world's... 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. It has the power to issue "compliance... read more
 
CIRCUIT BREAKER
A system of limiting trading highs and price limits on equities and derivatives markets designed to provide a cooling-off period during large, intraday... 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 public invest in a portfolio... 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. Santam breaks the definition... read more
 
CLASS
Some listed companies may issue a variety of different shares with different risk profiles to entice investors to support them. For example, there are ordinary... 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 which are incentive-based... 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 be registered and eventually settled... 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 shows that global warming... read more
 
CLOSE
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 and technical analysis... 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 prices calculated during the... 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 bureacracy associated with setting... 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 and technical analysis... 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, this period cannot be more... 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 purchase a shareholder's shares... 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 prices calculated during the... 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 usual calculation for cost of sales... 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 on the JSE were dematerialised,... 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 Clearing House in the world.... 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 and comes in four grades - Lisnite,... 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, for example, the code for Sasol... 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 developed from the International... 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 employees, how to determine whether... 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 up or down. Obviously, the country's... 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 itself and the improvements are... 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 be anything from rare stamps, to... 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 direct interest in settling negotiations... 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 public invest in a portfolio... 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. Most of these cases are settled... 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 and other trading strategies.... 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 options in a variety of precious and base metals. This... read more
 
COMMERCIAL
The commercial sector includes all companies that are involved in the production, processing, or retailing of products and services. Thus it excludes government... 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 it. The quarterly labour force survey... 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 the business... 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) are traded in markets... 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 countries, a large percentage of... 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 and peaked at $2000 a ton in early... 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 commodities of various types.... 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 options. Providing advice... 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 https://www.cipc.co.za/files/2413/9452/7679/CompaniesAct71_2008.pdf.... read more
 
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. It has the power to issue "compliance... read more
 
COMPANY
An organisation which is registered with the Companies and Intellectual Properties Commission and incorporated in terms of the Companies Act (71 of 2008). Companies are juristic... 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 liquidity test. To do this the company board of directors must... 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 and the company must ensure that... 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 that the company is registered... 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 liability partnership,... 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 resident of South Africa but can... read more
 
COMPANY TAX
In South Africa, company tax is 28% of a company's taxable income. Taxable income is the total of a company's incomes less all its deductible expenses. It is important... 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 all useful information about... 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 (HEPS) for the year ended... read more
 
COMPARATIVE FINANCIALS
The Companies Act (71 of 2008) requires that companies provide comparative figures when reporting their financial results. This usually takes the form of a second column... 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. This technique enables you to... 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. This is as opposed to... 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 each other on quality, price and... 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 from all companies... 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 Competition Commission. These... 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 are. To do this it uses 12 areas which indicate... 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 to the JSE Rules and... 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 to the capital and so on. Over... 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 Companies Act (71 of 2008),... 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 negotiating with various European... 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, the predator will make an offer... 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 which consist of data points confirming... 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 the trend is likely and... 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 of interest litter the landscape... read more
 
CONGESTION AREA OR PATTERN
 
CONGLOMERATE
 
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 blue chip share. Economists... read more
 
CONSOLIDATION
1. In technical analysis, where a chart moves up and down within a narrow range, bounded by a support and resistance level. This is called a sideways market... 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. The index includes wages... 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) in South Africa. It generally... read more
 
CONSUMER GOODS
 
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 Reserve Bank has chosen 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) in South Africa. It generally... 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 product (GDP). It was... 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 product (GDP). It was... 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 of spending which is independent... read more
 
CONTANGO
A futures market in which 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 can claim an amount equal to... 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 merged in order to ease the transition... 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 in the general direction as seen... 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 operations which they consider... 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 buying or selling the contract.... 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 everyone else is selling and... read more
 
CONTROL
Section 2 of the Companies Act (71 of 2008) says, "a person controls a juristic person, or its business, if:

(a) in the case of a juristic person that is a company—read more
 
CONTROL PREMIUM
 
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 a measure of the volatility... 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 words at the end of March, June,... 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 buying ordinary shares directly... read more
 
CONVERTIBLE SECURITIES
These are shares, debentures or other securities which are convertible either voluntarily or compulsorily into ordinary shares at some future specified date.... 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 wiring, in plumbing and construction.... 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 the 11-month rate of change for... 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 profitable core businesses.... 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 to do something (like take up a... 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, employees, the... 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 a bad corporate image usually... read more
 
CORPORATION
An organisation which is registered with the Companies and Intellectual Properties Commission and incorporated in terms of the Companies Act (71 of 2008). Companies are juristic... read more
 
CORRECTION
This term is used quite loosely to mean any short-term change in the direction in which a share or market is moving. More strictly, it refers to a temporary downward move... 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 they "correlate". When two... 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. Financial accounting simply... 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 what percentage.
 
COST OF CONTROL
 
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 mainly applied to precious metals... 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 (stock) at the start... read more
 
COSTS
This 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 paid even if there are no sales.... 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 CAC40 index... 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 be bought and sold by members... 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 the scrip or if you... 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 trend". It has been well said... 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 trend". It has been well said... read more
 
COVENANT
An agreement reached by a company with its creditors for the repayment of principal and interest on its outstanding debts. Debt covenants give the dates on which the debts and interest will be... read more
 
COVER
 
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 commodity.
 
COVERED WRITE
Writing a call option against a long position in the underlying security. By receiving a premium, the writer intends to realize additional return on the underlying common... 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 of 2020, the disease had spread... 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 Reserve Bank has chosen 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. They strive to... 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 sudden fall in stock market prices, sometimes in a single trading day, and which is usually followed by a bear trend.  This happens generally because market prices have risen to unrealistically... read more
 
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 and anything above that is caled... 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 or over 10 million are behind by... 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 has had to write off... 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 company in the short term (normal... 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 developed from the International... 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 often at a disadvantage because they do not have the... 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 liability partnership,... 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 United States, a GBP/JPY (British... 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 are extremely difficult... 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 Africa, this function is performed... 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 as STRATE (Share TRAnsactions... 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 options. Providing advice... 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 div" passes on the right to the... 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 are paid out before ordinary 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 is usually more than one or two... 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 of managing their own affairs... 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 it was known used to trade on the... 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 that actually had the... 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 certifying a deposit of gold at... 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 which have active markets... 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 than most derivatives, foreign exchange futures... 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 with other countries. It shows... 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 for a short time. Most commonly, these are stock, debtors... 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 be repaid within the normal commercial periods (30,... 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 obligations out of its short-term assets (as these... 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 so that it is easily identifiable.... 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 shares held in electronic format by STRATE.... read more
 
CUTOFF FREQUENCY
A point where higher frequency cycles will not pass through a filter (e.g., a 10-day SMA will eliminate cycles of 20 days or less).
 
CYCLE
Shares, industries and markets move in cycles. There are three types of cycles: primary, secondary and daily fluctuations. Primary trends last from 2 to 5 years, secondary trends... 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) then consumers tend to... 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) then consumers tend to... read more