If you Want to Trade in Stocks Then Know the Following Terms

If you want to trade in stocks then you should know the following terms

Acquisition

These are the terms used when one company makes a bid to acquire control of another company. Acquisition is in two categories:

  1. Hostile
  2. Friendly

Active Shares

These are shares which are most frequently traded (bought and sold) at the NSE, as distinguished from partly active shares in which trading is not frequent. The shares of most leading companies are active.

Agent

This is an appointed representative (of a stockbroker or investment bank) who is authorized to transact the business of buying and selling shares for a commission through and on behalf of the stockbroker or investment bank.

All or None

This is a restriction placed on a buy or sell order that instructs the broker to fill the order completely by the close of the market or the order should not take place.

Allotment Letter

This is the document issued by a company to its investors showing the number and value of shares allotted to the applicant after a successful subscription

Amalgamation

This is when two companies, previously independent of one another combine to form a new company.

Annual Report

This is a publication issued by a company to its shareholders at the company’s fiscal year-end. The document typically includes financial statements, reports on operations, the auditor’s report and other relevant information of the company. It is mandatory for all public companies.

Annual General Meeting

This is the mandatory meeting held once a year a year by all public companies. The directors of the company report to the shareholders on the year’s performance and the future of the company.

Articles of Association

This is the document that describes the purpose, the place of business and the details of the company. Every incorporated company in Kenya by law must have and submit this document to the registrar of companies and work by what it stipulates.

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