Nigerian Stock Exchange Financial term E-F

May 1, 2019 by  
Filed under Nigeria Stock Exchange

Earnings per share (EPS) – The portion of a company’s profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company’s profitability. It is calculated by dividing the net earnings (income or turnover) by the number of outstanding shares. EPS = Net Earnings / Outstanding Shares

End-to-End (or E2E or E-to-E) – A business term used to refer to an entire process, specifically the beginning and end points of a method or service. The theory embraces the concept of eliminating as many middle steps as possible to optimize performance and efficiency in any process. E2E trading automation takes the entire trade lifecycle into consideration. The concept refers to a fully automated (technology-driven) trade lifecycle to increase speed, reduce costs and improve efficiency.

Equity – The meaning is dependent on the context in which the term is used:

  1. A stock (share) or any other security representing an ownership interest. See Stock
  2. On a company’s balance sheet, the amount of funds contributed by the owners (the stockholders) plus the retained earnings (or losses). See Shareholders equity
  3. In the context of margin trading, the value of securities in a margin account minus what has been borrowed from the brokering firm
  4. In the context of real estate, the difference between the current market value of the property and the amount the owner still owes on the mortgage, if applicable. It is the amount that the owner would receive after selling a property and paying off a mortgage
  5. In terms of investment strategies, equity (stocks) is one of the principal asset classes; the other two are fixed-income (bonds) and cash/cash-equivalents. These are used in asset allocation planning to structure a desired risk and return profile for an investor’s portfolio

Ex-Dividend – A classification of trading shares when a declared dividend belongs to the seller rather than the buyer. A stock will be given ex-dividend status if a person has been confirmed by the company to receive the dividend payment. The person who owns the security on the ex-dividend date is awarded the payment, regardless of who currently holds the stock. See Dividend.

Ex-Dividend date – The day on and after which the right to receive a current dividend is not transferred from seller to buyer. After the ex-date is declared, the stock will usually drop in price by the amount of the expected dividend.

Ex-Rights – Shares that are trading but which no longer have rights attached because they have either expired, been transferred to another investor, or been exercised. Ex-rights shares are worth less than shares which are not yet ex-rights because they do not give a shareholder access to a rights offering. Renounceable rights may trade separately, allowing a shareholder to choose sell his or her rights, rather than exercise them. See Rights.

Ex-Rights date – The date when a buyer of common stock is no longer entitled to the rights that had been declared for the security.

Exchange traded fund (ETF) – A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. An ETF experiences price changes throughout the day as it is bought and sold, just like a stock. For this reason, it does not have its net asset value (NAV) calculated every day like a mutual fund. ETFs provide the diversification of an index fund, as well as the ability to sell short, buy on margin, and purchase as little as one share. Their expense ratios are lower than those of the average mutual fund, and brokers’ commissions (fees) for buying and selling ETFs are similar to the commissions investors pay for buying and selling stocks.

Exchange traded note (ETN) – A type of senior (unsubordinated) unsecured debt security designed to track the total return of an underlying market index or other benchmark, minus investor fees. An ETN allows investors to buy an obligation, similar to a forward contract, which is traded on an Exchange. The purpose of ETNs is to create a type of security that combines both the aspects of bonds and ETFs. ETNs are similar to ETFs as they are listed on an Exchange and can be bought and sold throughout the trading day. ETNs may be linked to a wide variety of assets, including indices and/or single reference assets based on a variety of products such as commodity futures (e.g., industrial metals, power and petroleum), foreign currencies and equities (grouped by such categories as economic sector, strategy or geographic location). The issuer of an ETN is obligated to deliver the asset performance (less fees) in cash upon early repurchase or maturity . Investors can also hold the debt security until maturity, at which time the issuer will give the investor a cash amount that would be equal to the principal amount (subject to the day’s index factor). The creditworthiness of an ETN itself is not rated, but is based instead on the creditworthiness of the issuer, making the issuer’s credit rating an important consideration for ETN investors.

Exchange traded product (ETP) – A type of security that is derivatively-priced and which trades intra-day on a national securities exchange. ETPs are priced, where the value is derived from another investment instrument such as a commodity, currency, share price or interest rate. Generally, ETPs are benchmarked to stocks, commodities, indices or they can be actively managed funds. See Exchange traded funds and Exchange traded notes.

Financial adviser – See Investment adviser.

Foreign investor – Any investor who participates financially in a country other than the investor’s own. This can happen on any scale, from a foreign national buying securities to a major corporation buying out a company based in a foreign country.

Foreign portfolio investment (FPI) – Foreign portfolio investment typically involves short-term positions in financial assets of international markets, and is similar to investing in domestic securities. FPI allows investors to take part in the profitability of firms operating abroad without having to directly manage their operations. This type of investment is relatively liquid, depending on the volatility of the market invested in. Foreign portfolio investment differs from foreign direct investment (FDI), in which a company fully controls a foreign firm.

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