Paid-Up Capital

See outstanding shares.

Par-Value (Par Price)

The nominal value or face value of a security. It is the value assigned to the security in the company's memorandum. (See face value).

Participating Preference Shares

Preference shares which entitle the holders to partake in additional dividends of a company (i.e. apart from the stipulated dividend to preference shareholders) under stated conditions. This contrasts with non-participating preference shares which restricted to the stipulated dividend.

Poison Pill

A strategy sometimes employed by target companies in a take-over bid to reduce the attractiveness of their securities to the companies intending the take-over. This is often done by enlarging the outstanding shares of a target company through a new issue of shares to its shareholders at a discount to the market price, thus making the take-over quite expensive to the company intending the take-over.

Portfolio

The totality of the various types of securities and other financial instruments (stock, bonds, treasury bills, etc.) held by an investor. Although it mostly refers to financial instruments, real estate investments are often included.

Portfolio Manager

A financial intermediary who uses his professional skills to manage for a fee, the portfolio of investments of his clients.

Preference Shares

A class of shares whose holders have a prior claim over equity holders on the earnings of the issuer but do not have a priority claim over obligations to creditors of the company. Dividends paid to preference shareholders, unlike equity holders, are based on a pre-determined rate. There are variants of preference shares.

Premium

The difference between par value and market price and same time between transaction price and the previous m price when the difference is positive.

Price-Earnings Ratio

The ratio of price earnings per share i. e the value ordinary shares in relation to earnings a period. It is derived by dividing market price by the earnings per share a company. The P/E ratio is a measure the price being paid by investors for given earnings of a company and shows the time it would take an investor recoup his investment in a company profit and distributed income are held constant.

Price-Sensitive-Information

Information about a company which could influence the price of its securities on a stock exchange. Such information is required by law to be disclosed to the public immediately while insiders are prohibited from taking undue advantage of price-sensitive information to trade in the stock market.

Primary Market

The market for the sale and purchase of freshly issued (additional) securities of a corporate entity or government. (also called new issues market).

Principal

(i) The value of a debt security as issued by a company government. The principal of a debt instrument does not include interest and premium on the bond. It is the amount redeemed by the issuer on maturity.

 (ii) Principal also refers to a dealer what acts for his own account in a stock market transaction.

 (iii) Also refers to a stockbroker's client for whom the stockbroker is an agent.

Private Placement

The sale of securities to a select group of investors as opposed to the general public. It usually by-passes the normal sales mechanism.

Program Trading

Automatic buying selling of shares on the instruction of computer, according to whether prices are rising or falling. En-masse program trading destabilises markets.

Prospectus

A document issued by a company giving detailed information about itself and the securities being offered to the public. Such documents are usually required by law to be filed and vetted by securities commissions for completeness and subsequent registration before their release to the public. The prospectus is, in other words, a vending document, which enables investors evaluate the securities being offered and decide whether or not to participate.

Proxy

(i)            An authority given by a shareholder to someone else to act on his behalf at a meeting of shareholders. Usually, a proxy card would be completed and sent to the company giving authority to the proxy to vote on his behalf. 228 Proxy

(ii)          A document issued by a public company to its shareholders providing information on matters to which they would vote by proxy.

Public Offering

An invitation by a company or government to the general public to purchase its securities on offer. (see offer for subscription and offer for sale).