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Aftermarket Trading of an offering on or after the listing date. Allocation The number of shares given to a client from an offering. Australian Securities and Investment Commission (ASIC) A government agency that regulates and enforces securities laws & protects investors. ASIC maintains a database of Australia's 1.2 million companies. Australian Stock Exchange (ASX) Australia's permier market for trading shares in listed companies. Buyer's Market A market where buyers determine the price, usually because of an oversupply of stock. CHESS Clearing House Electronic Sub-register System A system that manages the settlement of ASX stock trades. Closing Price The last transaction price for a stock on a particular day. Co-Manager An underwriter that assists with the distribution of a offering. Delisting Removal of a company from trading on the ASX, usually because of merger or insolvency. Director A statutory officeholder of a company who is responsible for major decisions. Demutualisation A process whereby a mutual organisation turns itself into a shareholder owned company. Members of the mutual organisation become the new shareholders. Disclosure The reporting of financial statements, management shareholdings and other information that can be used for making investment decisions. Dividend The amount of money distrubuted to company shareholders out of net profits, usually biannually. Due Dilegence A process of verifying information about a company, including financial statements, management, market share, legal matters and risks. Escrow An agreement whereby certain individuals and corporations must retain stock and not sell for a given time. Directors of newly listed company may have shares put in escrow. Float A term used in Australia for raising capital and listing on the ASX. Going Public The process of taking a private company (where the shares are in private hands) and converting the ownership to public hands (where shares are traded on the ASX). Green Shoe An amount of shares that is reserved for issuing at the original price at the underwriter's option. This is used by the underwriter mainain an orderly market after listing. Holding Company A company that owns enough shares of another company to secure voting control. IPO - Initial Public Offering The first time a company offers it shares to the public. Issue Price The price at which a new security will be sold to the public. Lead Manager The lead underwriter who, among other things, is in charge of organising and distributing stock to the underwriters, and making stabilizing transactions once the new issue begins to trade. Lead Underwriter The underwriter who, among other things, helps set the offering price and organises the other underwriters in selling a new issue. Listing Rules A set of rules hat all companies must follow for trading on the ASX. They include disclosing decisions that may affect the share price. Market Capitalization The value that the market puts on a company, calculated by multiplying the shares outstanding by the share price. New Issue Shares offered for sale to the public for the first time. Offering Date The first day a security is publicly offered for sale. Offering Price The price for which a new security issue will be sold to the public. Official List The register of public companies that trade on the ASX. Opening Premium The difference between the opening price and offering price, given that the difference is positive. Outstanding Shares The number of shares that have been issued by the company. Oversubscribed When the demand for shares in a new listing exceeds supply, the issue is said to be oversubscrived. There may be an opening premium in this case. Privatisation The change of ownership of a company from government control to private control. Pipeline The new issues that are due to go public withing a given timeframe. Postponement An offering that is pushed back to a later date. This may lead to the offering being cancelled. Privately Held A company that has never been offered for sale publicly. Private Placement An investment in a company by a group of private investors. Prospectus A company document registered with ASIC to provide prospective buyers information about the company's financial performance, management, risks and prospects. Risk Factors Considerations that are disclosed in the prospectus that might materially affect the company's financials, stock price, or reputation in a negative way. Road Show Formal presentations made by underwriters usually to institutional investors to inform them of an issue. Secondary Offering When a public company issues additional shares to the public. Seller's Market A market where there is more demand than supply for a security. Selling Shareholders Investors in a company who sell part or all of their stake as part of that company's IPO. Settlement Date The date that securities must be paid for. Shareholder Any person who owns shares of a company's stock. Sponsoring Broker For a fee the sponsoring broker manages the whole listing process, from putting the prospectus together through to marketing the float to the investment community. Unlike an underwriter, a sponsoring broker does not take on any of the risk that the issued shares are not fully taken up by offering to buy the shortfall. Stock Exchange The physical location where brokers transact business for their clients. The ASX is the principal stock exchange in Australia. Supplementary Prospectus An additional document that is filed with ASX that has additional information regarding the proposed offering for the company. Tranche An allocation of shares, made to a partiaular region or at a particular time. Underwriter A stockbroker or investment bank that sells shares in a new issue to the public. The underwriter will profit from the fees generated by the offering. Use of Proceeds How the company plans to use the monies it generated from an IPO or Secondary. Valuation The measure of what a company expecting to come public is worth. Volatility Movement in the price of a stock from its high and low. Withdrawal When a company decides to not continue with its proposed offering of securities. The reasons for this can be numerous and don't always signify trouble with the proposed offering. This term is sometimes used with the word cancellation. Top |
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