The new investor’s glossary: C

Fsp Invest, 10 Dec. 2013

Tags: glossary, new investor’s glossary, investing, introduction to investing, terminology, investing terminology, investment glossary,

If you’re desperate to start your own investment portfolio, but the terminology leaves you feeling a bit lost, then this is for you. Once you get to grips with the basic language used in investing, you’ll be ready to begin. Read on to uncover C…

Don’t let the language used in investing put you off, the research team at Red Hot Penny Shares explains… It all sounds a lot more complicated than it really is.

You can check out A to B here.

Your essential investment glossary

Capital Gains Tax (CGT): This tax is payable to SARS on profits on the sale of a share. You just have to check out if you’re liable, depending on the values involved.

Capitalisation issue: This is the free issue to shareholders of new fully paid shares by a company from its reserves. If it’s the same class of shares, they will rank equally with existing shares. This is also something termed as a bonus issue. But a capitalisation issue isn’t a free gift to shareholders, as the same market capitalisation now covers a greater number of shares than before. If you sell the new shares, you reduce your percentage holding in the company. When the number of shares increases, the market price of the shares declines to reflect this.

Closing price: This is the last price of the day for a particular share. It is the price you will generally see in the financial pages of a newspaper.

Consolidation of shares: This is the consolidation of a company’s shares into a lesser number of greater nominal value. So, if a share is worth R20 and a company reduces its number of shares by 50%, the share price would then be R40.

Coupon rate: This is the rate of interest payable on bonds.

Cum dividend: This is when you can still buy a share and receive the dividend due.

So there you have it, C of the new investor’s glossary.

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