Back to: COMMERCE SS2
Welcome to Class !!
We are eager to have you join us !!
In today’s Commerce class, We will continue learning about The Stock Exchange. We hope you enjoy the class!
SPECULATORS AT THE STOCK EXCHANGE
- BULL: This is a speculator who buys securities with the hope that the price will rise and that he will sell at a higher price for a gain.
- BEAR: This is a speculator who sells securities hoping that the price will fall so that he can buy them at lower prices later and thereby make a profit.
- STAG: This is a speculator who buys new issues directly from a public limited company in the hope that the shares or stocks will be in great demand once they are quoted on the stock exchange a few days later. The stag hopes to make a profit after selling.
METHODS OF ACHIEVING QUOTATION OF SHARE AT THE STOCK EXCHANGE
- Offer for sale
- Offer for subscription
- Introduction
- Placement
THE SECOND – TIER SECURITIES MARKET
Small and medium-sized companies are usually unable to fulfil all the conditions required for a conventional listing on the Stock Exchange.
Therefore an alternative – The Second – Tier market with less stringent conditions and the entry requirements was introduced to enable such companies to raise funds through the capital market.
The SSM is an alternative market created to provide for the buying and the selling of securities issued by small and medium-sized companies who are unable to meet the requirements for a quotation on the main Stock Exchange.
TERMINOLOGIES CONNECTED WITH THE STOCK EXCHANGE
- BLUE CHIPS: These are the best industrial shares associated with large nationally known companies. They give a safe and reliable return (e.g. dividends) and has growth potentials in terms of share price appreciation and dividend income.
- RIGHT ISSUE: This is an offer of new shares to existing shareholders of a company who must pay for the additional shares being subscribed.
- CUM – DIV (i.e. Cum Dividend) – Meaning including dividend or with dividend – that is, the purchaser of a stock termed “cum div” will be entitled to dividend when due.
- EX DIV (i.e. Ex-Dividend) – Meaning the purchaser of stock with such a term will not be entitled to dividends.
EVALUATION
- Explain five Securities traded on the Stock Exchange
- What is the importance of the Stock Exchange to the economic growth of Nigeria?
GENERAL EVALUATION QUESTIONS
- Distinguish between Authorized Capital and Called-Up Capital
- State five characteristics of a limited liability company
- List five advantages of after-sales services
- List and explain three types of life assurance policies
- Explain three types of accounts that are operated in a commercial bank
READING ASSIGNMENT
Essential Commerce for SSS by O.A. Longe Page 202 – 209.
THEORY
- List four securities traded on the stock exchange.
- What is the second- Tier securities market?
We have come to the end of this class. We do hope you enjoyed the class?
Should you have any further question, feel free to ask in the comment section below and trust us to respond as soon as possible.
In our next class, we will be learning about Communication. We are very much eager to meet you there.
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