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Frequently Used Terms & Ratios

1. Primary Market: This is where newly security is first offered (sold), whether in IPO's or as an additional issue of stock or bonds by a company that is already public.

2. Secondary Market: It is the market where trading in securities takes place in accordance with the laws, regulations and instructions in force.

3. Par value: Par value is the nominal value of a security. It is set by the company issuing the share, at the time of the public offering.

4. Book Value Per Share: It reflects the accounting value of the share and computed by dividing the Shareholders equities on the number of subscribed shares. .

5. Shareholder's equity: Balance sheet item that includes the book value of ownership in the corporation. It includes paid-up capital, issue premium, reserves and retained earning sand subtracting loss and discount on par.

6. Market Capitalization: This is the aggregate market value of a listed security. It is equal to the market price per share, multiplied by the total number of outstanding share. .

7. Net Income: Is the excess of revenue earned over related expenses incurred. This caption and amount is usually found at the bottom of a company's Profit and Loss statement.

8. Cash Dividends: The amount of cash distributed to the shareholders by a company, expressed as a percentage of par value.

9. Bonus share: A bonus issue is described as a free issue, a scrip issue, a capitalization issue and a stock dividend. These are new shares issued by a company to its existing shareholders, usually in a mathematical proportion to the number of shares already held. What the company is doing is turning part of the profits and reserves it will have accumulated into capital. .

10. Market index: An index is a statistical number that measure the change of securities prices now relative to some base value .

11. Market Price: The last reported price at which a security was traded on an exchange or the current quote. .

12. Buy Order: It is an instruction given by an investor to a broker to buy a specified amount of shares of a certain company .

13. Sell Order: It is an instruction given by an investor to a broker to sell a specified amount of shares of a certain company.

14. Initial Public Offering (IPO): A company first public issue of shares.

15. Share Book: A share book is an official record of ownership of company information about shareholders such as their names, addresses and numbers of shares held.

16. Security: An asset such as share or bond and units of Mutual Funds.

17. Investor: An individual, establishment or a company that owns shares in a public joint stock Company.

18. Investor Number: A unique number given to an investor.

19. Broker: A Broker is a company licensed by the government authorities according to the Federal rules and regulations. A broker is authorized to trade at Abu Dhabi Securities Market on behalf of an investor after obtaining an official approval from the investor.

20. Registrar: The division that maintains the investor share register.

21. Trading Floor: The area in the ADSM or DFM where brokers and investors interact with each other to execute orders.

22. Share: An instrument or legal right signifying equity, or an ownership position, in a corporation.

23. Earnings Per Share (EPS in AED) = Net Income / Weighted Average Number of Share

24. Return on paid-in Capital (in%) = Net Income x 100% / Paid-up Capital

25. Return On Equity (ROE%) = Net Income x 100% / Shareholder's Equity

26. Return on Assets (%) = Net Income x 100% / Total Assets

27. Cash Dividend to Paid-in Capital (%) = Cash Dividend x 100% / Paid-in Capital

28. Dividend Yield (%) = Annual Cash Dividend Per Share x 100% / Market Price Per Share

29. Price Earning Ratio (PE in Times) = Market Price Per Share / Earnings Per Share

30. Market to Book Value (times) = Market Price of Share / Book Value of Equity Per Share