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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

be paid out before dividends to common shareholders and mortgages or mortgage-backed securi es. Their equity measures a company's profitability by revealing how security before it can be loaned out. During the loan period,
the shares usually do not have vo ng rights. Precise details revenues are generated primarily by the interest that much profit a company generates with the money corporate ac ons, dividend payments, etc. are retained by
about the structure of preference stock are specific to each they earn on the mortgage loans. shareholders have invested. More simply, it shows how the owner.
company and are stated in a Cer ficate of Designa on. well a company uses investment funds to generate
Although they may be conver ble into common stock, they 3. Hybrid REITs: Combine the investment strategies of earnings growth; how efficiently it uses its assets to Share price – The Naira value of a single share (stock) of a
are rated by credit ra ng companies, and are callable at the equity REITs and mortgage REITs by inves ng in both produce earnings. ROE is expressed as a percentage. It may company's tradable stocks.
op on of the corpora on. Preference stocks offer the proper es and mortgages. be more meaningful to look at ROE over a period of five
issuer an a rac ve alterna ve and cost-effec ve form of years rather than one year. ROE = Net Income / Shareholder Share value – See Nominal value.
financing—e.g., a company can defer dividends by going Receiving agent – Banks and stockbroking firms appointed Equity Reverse stock split – A reduc on in the number of a
into arrears without much of a penalty or risk to their credit by issuing houses to serve as centers for the distribu on of company's shares outstanding that increases the par value Shareholders' equity (or share capital or stockholders'
ra ng; they are also useful as a means of preven ng hos le offer applica on forms, as well as for the receipt of of its stock or earnings per share (EPS). equity or book value) – The net worth of a company. It is
takeovers. subscrip on monies, on behalf of an issuing house. derived by taking the company's total assets and
Receiving agents charge a fee for the service they offer. Rights (or subscrip on rights or share purchase rights) – subtrac ng the total liabili es. Another way to calculate
Price-to-earnings ra o (or P/E ra o or P/E) – The When a company wants to raise addi onal capital, it may shareholders' equity is share capital plus retained earnings
rela onship between the stock price and the company's Receiving bank – Banks designated by an issuer to receive give stockholders en tlement to purchase new shares at a minus treasury shares. It represents the amount by which a
earnings. It is a measure of the price paid for a share, proceeds. predetermined price (normally less than the current company is financed through common and preferred
rela ve to the annual net income or profit earned by the market price) in propor on to the number of shares shares. The shareholders' equity number is usually located
company (per share). The P/E is a financial ra o used for Registrar – An ins tu on, usually a bank or a trust company already owned. Rights are issued only for a short period of on a company's balance sheet.
valua on: a higher P/E means investors are paying more for that is responsible for keeping records of shareholders and me, a er which they expire. Failure to exercise or sell
each unit of net income, so the stock is, technically, more bondholders. They ensure that the amount of shares rights is an actual loss to the stockholder. Rights are a basic Short selling – The sale of a security that is not owned by
expensive. P/E is calculated as stock price divided by annual outstanding in the market matches the amount of shares form of deriva ves. the seller, or that the seller has borrowed. Short selling is
earnings per share typically the net income of the company authorized by the company. For bonds, the registrar also mo vated by the belief that a security's price will decline,
for the most recent 12-month period divided by the makes sure that the company's obliga on from a bond Risk – The chance that an investment's actual return will be enabling it to be bought back at a lower price to make a
number of shares issued). P/E = Stock Price / EPS. issue is cer fied as being an actual legal obliga on. They different than the expected return. With all investments profit. Short selling may be prompted by specula on, or by
perform corporate ac ons for the companies they there is an element of risk, desirable or undesirable. The the desire to hedge the downside risk of a long posi on in
Private investor (or retail investor or individual investor) – represent, arrange general and extraordinary mee ngs, basic defini on for investment risk is devia on from an the same security or a related one. Since the risk of loss on a
An individual (not a corpora on, partnership, distribute annual reports and no ces of shareholders' expected outcome. This can be either posi ve or nega ve. short sale is theore cally infinite, short selling should only
proprietorship or any other en ty whatsoever) who mee ngs, and verify/reconcile investors' claims with the be used by experienced traders who are familiar with the
purchases securi es for himself or herself—specifically for depository of the CSCS. Scrip issue – See Bonus issue. inherent risks associated with this type of transac on.
his/her personal investment por olio—is not registered
with any securi es agency, regulatory or self-regulatory Repor ng accountants – Accoun ng firms which provide Securi es and Exchange Commission (SEC) –The SEC of Solicitor – Law firm which represents an issue or the issuer.
body, and is not in any way engaged in providing independent assessments of issuer accounts. They also Nigeria is the statutory regulatory agency of the Nigerian In prac ce, two solicitors are required for a public issue of
investment services. examine and review forecasts, and prepare the issuer's capital market. The SEC is a governmental agency securi es—one solicitor for the issuer and one for the
statement of indebtedness, among other things. mandated to regulate and develop the Nigerian capital issue. On the issuer (the company) side, the solicitor
Professional investor (or broker-dealer) – A corpora on, market. The SEC derives its powers from the Investment ensures the Memorandum and Ar cles are in compliance
partnership, proprietorship or any other en ty whatsoever Return on assets (ROA) – An indicator of how profitable a and Securi es Act (ISA). Visit www.sec.gov.ng for more with the legal requirements of a public company and also
that purchases securi es for the en ty's investment company is rela ve to its total assets. ROA tells investors informa on. ensures the company, based on authorized capital, can
por olio; or a natural person registered with any securi es how much profit a company generated for each N1 in accommodate the issue being proposed.
agency, regulatory or self-regulatory body, and is engaged assets. It measures how effec vely a company is conver ng Security – See Investment product.
in providing investment services. the money it has to invest (shareholders' capital plus short
and long-term borrowed funds) into net income. It is Securi es lending – The act of loaning a stock, deriva ve, Stock (or common stock or share) – A type of security that
Real Estate Investment Trust (REIT) –A security that sells considered the most stringent test of return to other security to an investor or firm. Securi es lending signifies ownership in a corpora on and represents a claim
like a stock and invests in real estate directly, either through shareholders. Companies such as telecommunica on requires the borrower to put up collateral, whether cash, on part of the corpora on's assets and earnings. There are
proper es or mortgages. There are three types of REITs: providers, car manufacturers and railroads are very asset security or a le er of credit, which the borrower is obliged two main types of stock:
intensive, meaning they require big, expensive machinery to return at the end of the agreed upon loan period. When
1. Equity REITs: Invest in and own proper es (thus or equipment to generate a profit. It a company has no a security is loaned, the tle and the ownership are 1. Common stock usually en tles the owner to vote at
responsible for the equity or value of their real estate debt, the ROA and ROE figures will be the same. ROA is a temporarily transferred to the borrower. Borrowers shareholders' mee ngs and to receive dividends
assets). Their revenues come principally from their company's annual earnings divided by its total assets. It is looking to borrow a security would do this through a
proper es' rents. expressed as a percentage. Some mes this is referred to as securi es lending agent a er entering into a global 2. Preferred stock generally does not have vo ng rights,
"return on investment". ROA = Net Income / Total Assets securi es lending agreement (GSLA). The securi es but has a higher claim on assets and earnings than
2. Mortgage REITs: Deal in investment and ownership of Return on equity (ROE) – The amount of net income lending agent would, in turn, have a securi es lending common shares
2017/2018 NSE FACTBOOK mortgages to owners of real estate, or purchase exis ng returned as a percentage of shareholder equity. Return on 2017/2018 NSE FACTBOOK
authoriza on agreement (SLAA) with the owner of the
property mortgages. These REITs loan money for

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