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You are Here : Home > Investor Education > Glossary

Glossary to investment terminology : B

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Back Office
Refers to that segment of a stockbroker's office that has little or no direct relationship with the public but which is generally responsible for nearly all processes involved in effecting a transaction.

Bad Delivery
This is when the delivery of a share certificate, together with the deed of transfer is considered defective or if it is not delivered within a stipulated period. Defects may arise from mutilation, correction, overwriting, erasure, alterations, illegibility, inconsistencies in names, missing details etc. In case your stockbroker gives you a bad delivery, he is obliged to get you a replacement of the certificate or the deed of transfer.

Basis Point
One hundredth of a percentage point. Example; the difference between 4.50% and 4.75% is 25 basis points.

A stock market speculator who expects share prices to fall and therefore keeps selling in anticipation to buy the shares later at a lower price. All individuals can be bearish at times although some are perennially so. The term is derived from the attacking posture of the bear; pushing downwards.

Bear Market / Bear Cycle
An extended period when share prices generally keep falling and the stock market index keeps going down.

Refers to the bell which is sounded to open and close trading at the Nairobi Securities Exchange, thus the Opening Bell and Closing Bell respectively.

Beneficial Owner
A beneficial owner is the true owner of a security who enjoys the benefits of ownership even though the title could be in another name.

The highest price a buyer is willing to pay for a stock. It stipulates both the price and the quantity that the buyer requires to purchase.

Block Order
An order placed for the transaction (purchase or sale) of a very large quantity of securities.

Blue Chip Stocks
Are the stocks of leading, well established, capitalized and nationally known companies that have a proven record of earnings and pay a reasonable dividend.

Bonds are also referred to as fixed income securities. They are promissory notes issued by government and corporations that entitle the investor to a specific interest at specific intervals over a specified length of time and to receive the principal upon maturity. Unlike shares, bonds do not carry with them any sense of ownership but guarantee interest even when the issuer does not register a profit.

Bonus Issue
These are additional shares issued to existing shareholders in proportion to their holdings. They are issued free of cost.

Book Closure
This is when a company announces the issuance of a dividend or a bonus to its shareholders.

Book Loss
This is the perceived loss when the value of a stock falls but is not actually sustained as the investor has not sold when the price has fallen.

Book Profit
This is when the value of a stock appreciates in price but it is unrealized profit since the investor has not sold any.

This is term is generally used to refer to the Nairobi Securities Exchange.

Broker is short for Stockbroker and refers to a member of the Nairobi Securities Exchange who is licensed to buy or sell securities on behalf of investors. Brokers are essentially the link between investors and the stock market. When acting on behalf of an investor for the purchase or sale of a listed stock, the broker does not own the securities but charges a commission on the gross value of the transaction.

A stock market speculator who expects share prices to rise and therefore keeps buying in anticipation to sell them later and make a profit.