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2017/2018 NSE FACT BOOK 2017/2018 NSE FACT BOOK
The Performance Documentary of Listed Nigerian Companies The Performance Documentary of Listed Nigerian Companies

paid by investors for the newly issued equi es goes middleman between two par es in a financial transac on. securi es, either coming from the supply side (supplying divided by the number of shares outstanding. NAV = Total
directly to the issuer. An IPO allows an issuer to tap a Commercial banks and other financial ins tu ons, such as excess money in the form of investments) or from the Value of Securi es -Liabili es / Shares Outstanding
wide pool of investors that provide capital for future investment bank, broker-dealers, mutual funds and demand side (demanding excess money in the form of Nominal value (or face value or par value or no onal
growth, repayment of debt or working capital. A pension funds, are all examples of intermediaries. Market borrowed equity). These investors are categorized into (a) amount) – The value of a security that is set by the company
company selling common shares is never required to intermediaries offer a number of services to the buy side investor versus speculator, and (b) ins tu onal versus issuing it; unrelated to market value. For stocks it is the
repay the capital to investors. IPOs usually involve one and the sell side, and charge investors advisory fees, retail. The term may be used loosely to include all investors original cost of the stocks; for bonds it is the amount paid to
or more investment banks (i.e., underwriters) with broking commissions, proprietary trading fees, etc. while in the market. the holder at maturity.
whom the issuer enters into a contractual agreement to providing other benefits such as safety, liquidity and
sell its securi es to the public. Public offerings are sold economies of scale. Market trend – The general direc on of a market – typically Open-ended fund – A collec ve investment scheme with
to both ins tu onal investors and retail clients of up/rising (bullish), down/falling (bearish) or steady. Trends an unlimited number of shares. There are no restric ons on
underwriters. IPOs also involve one or more law firms Market maker – A broker-dealer firm that accepts the risk can vary in length from short, to intermediate, to long term. the amount of shares the fund may issue. It can issue and
specializing in securi es law of holding a certain quan ty of a par cular security, in redeem shares at any me since investors purchase shares
order to facilitate trading in that security. Each market Markets – A stock exchange has the ability to trade from the fund itself than from exis ng shareholders. If
2. Secondary Offering – A subsequent lis ng of securi es maker competes for customer order flow by displaying buy different investment products (securi es). As a result, a demand is high, the fund will con nue to issue shares --
already in issue. This can be new securi es for public and sell quota ons for a guaranteed number of securi es. stock exchange can create different markets in which there is no limit to the fund size, and the price of the units
sale from a company that has already done an IPO. It is If these prices are met, they will immediately buy for or sell different securi es trade. These markets are usually an does not rise and fall in response to demand. Open-end
known as a Lis ng by Introduc on. In many cases, this from their own accounts. This process takes place in mere electronic pla orm that can accommodate the rules for funds also buy back shares when investors wish to sell. The
type of offering is made by companies looking to seconds. Market makers are very important for trading a specific security. The Nigerian Stock Exchange value at which shares are bought or sold is directly linked to
refinance or raise capital for growth. This type of lis ng maintaining liquidity and efficiency for the securi es they currently lists three (3) types of products on three (3) the fund's Net Asset Value (NAV). Shares in open-ended
increases outstanding shares, and spreads a company's make markets in. Market makers are required to maintain a boards — equi es (stock, preference stock, structured funds are purchased from the fund itself or one of its
market capitaliza on (value) over a greater number of strict separa on of the market-making side and the products), bonds (corporate, federal and state/local) and agents; they are not traded on exchanges.
shares. It also dilutes the posi ons of shareholders brokerage side of their business, to prevent their brokers ETFs— that are traded on three (3) different boards.
owning previously issued shares. Another type of from recommending a specific security simply because the Outstanding shares –Stock currently held by investors,
secondary lis ng is the sale of securi es owned by firm makes a market in that security. A market maker makes Mutual fund (or memorandum quota on) – A including restricted shares owned by the company's
major shareholders in a company. They may choose to money by buying stock at a lower price than the price at professionally managed type of collec ve investment officers and insiders, as well as those held by the public.
sell all or a large por on of their holdings. This is known which they sell it, or selling the stock at a higher price than scheme that pools money from many investors and invests Shares that have been repurchased (bought back) by the
as a Placement. In such cases, the offering is triggered they buy it back. Ordinarily they can make money in rising typically in investment securi es (stocks, bonds, short- company are not considered outstanding stock.
by founders of a business (or the original financiers) or falling markets, by taking advantage of the difference term money market instruments, other mutual funds,
wan ng to decrease their posi ons in a company. This between "bid" and "offer" prices. There are different types other securi es, and/or commodi es). A mutual fund is Por olio – A por olio may contain a combina on of
kind of offering does not increase the number of of market makers: usually an open-ended fund and has a fund manager that investments, including bank accounts, bonds, stocks,
outstanding shares. It usually happens gradually to trades (buys and sells) the fund's investments in deeds and businesses. Any investment instrument that is
ensure no nega ve effects on the price of the equity, 1. Supplementary market maker – In the Nigerian capital accordance with the fund's investment objec ve. A fund's likely to retain its value and/or produce a return can be
and it does not dilute the posi ons of shareholders market, supplementary market makers encourage investment objec ves (and or its names) define the type of included in an investment por olio. Types of instruments
owning previously issued shares compe on among equity market makers, and further investments in which the fund invests. In return for one's vary based on individual circumstances and investment
enhance the market maker liquidity provision. A investment, shareholders receive an equity posi on in the goals. Por olios are constructed based on an investor's
3. Merger/Acquisi on – A company may be listed as a supplemental market maker is required to provide a fund, and in effect, in each of the fund's underlying budget and short- and long-term goals. Different types of
result of a merger with or an acquisi on by an already quote for securi es in which they make markets for securi es. A fund's net asset value (NAV) is calculated every investment instruments offer different rates of return and
listed company 60% of the trading day. day. While funds offer a choice of liquidity and carry their own unique degree of risk.
convenience, they charge fees and o en require a
Liquidity – The degree to which an asset or security can be 2. Liquidity provider – Serve the same purpose as market minimum investment. A contractual investment advisory Por olio manager – Ins tu ons that manage the
bought or sold in the market without affec ng the asset's makers, primarily for the secondary debt (bond) fee is charged for the management of the fund's investment por olios of clients. They receive funds to be
price. Liquidity is characterized by a high level of trading market. investments, along with other fees. Some of the more invested in securi es, most o en, of their own choice. They
ac vity. Assets that can be easily bought or sold are known significant (in terms of amount) are, transfer agent are required to exercise discre on in the best interest of
as liquid assets. Market operator – Professional intermediaries that offer expense, custodian expense, legal/audit expense, fund their clients, and to provide their clients periodic
specialized capital market services in various forms, accoun ng expense, registra on expense, board of statements, clearly detailing all investment posi ons.
Market capitaliza on (or market cap) – The total market including buying and selling securi es, providing directors/trustees expense, etc. Shareholders are free to
value of all of a company's outstanding shares. Market investment advice, making a market, audi ng accounts of sell their shares at any me, although the price of a share of Preference stock (or preference shares or preferred stock
capitaliza on is calculated by mul plying a company's companies who have raised capital from the market, the fund will fluctuate daily, depending upon the or preferred shares) – A special equity security that has
outstanding shares by the current market price of one providing legal advice to investors and issuers, managing performance of the securi es held. proper es of both an equity (poten al apprecia on) and a
share. The investment community uses this figure to investment por olios, and underwri ng securi es, among debt instrument (fixed dividends)—a hybrid instrument.
determine a company's size, as opposed to sales or total others. Net Asset Value (NAV) – Used to calculate the 'per share' They provide a class of ownership in a corpora on that has
2017/2018 NSE FACTBOOK Market intermediary – A business en ty that acts as the Market par cipant – In finance, market par cipants are price. It is derived by taking the total value of all the earnings than common stock, but are subordinate to 2017/2018 NSE FACTBOOK
asset figures.
Naira amount of a fund. NAV represents the fund's market
a higher claim on the assets (in the event of liquida on) and
bonds. Preference stock generally has a dividend that must
securi es in the fund (or por olio) minus any liabili es
investors that regularly purchase equity and debt

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