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You are Here : Home > Investor Education > Glossary

Glossary to investment terminology : Description

 
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These are key words found in investment industry.

Kindly select a letter from the alphabetical links above to view description.

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 successful subscription.

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

Annual Report
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 on the company. It is mandatory for all public companies.

Annual General Meeting
This is a mandatory meeting held once a year by all public companies. The directors of the company report to the shareholders on the year's performance and future of the company. All shareholders are invited and allowed to ask questions. Notice of such a meeting is mandatory.

Articles of Association
This is a document describing the purpose, place of business and details of a 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. The articles of association together with the memorandum of association form the constitution of a company.

Ask
It is also known as the offer price. It is the lowest price which a seller is willing to accept for a security. It also typically stipulates the amount of the security the seller is willing to sell.

Assets
This is anything owned by a company that has a market value. This includes land, buildings, equipment, furniture, cash, bank deposits, manufactured goods ready to be sold, goodwill, trademarks etc.

At Best Order
This is an instruction from a client to a broker authorizing the broker to use his discretion and try to execute an order at the best possible prize.

Authorized Shares (Stock)
This is the total number of shares that a company is permitted to issue according to its memorandum and articles of association. This number can only be increased if a resolution is passed to that effect by the majority of the shareholders and an application made to the registrar of companies.

Authorized Share Capital
The authorized share capital is calculated by multiplying the nominal share value with the total number of authorized shares. This is stated in the memorandum and articles of association as required by law.

Automated Trading System (ATS)
This is the online trading system software used at the Nairobi Stock Exchange to effect all trading transactions. It can be accessed through the NSE trading floor (through the Local Area Network) or from the stockbrokers' offices (through the Wide Area Network). It is completely controlled and managed by the NSE.

Averaging Down
Buying more shares in a company at a price that is lower than the price paid for the initial investment. The aim of averaging down is to reduce the average cost per share bought.