Initial Public Offering a.k.a IPO - The period when a business wants to be listed on the Stock market and thus starts to issue stocks for investors to ballot
Straits Times Index a.k.a STI - This index takes the average price of the total share price of the top 30 companies in Singapore. Some examples of the shares included in this index are DBS, SIA, SGX etc. The shares are changed according to the performance of the companies in Singapore. This index also acts as a gauge of the direction for the whole Singapore market.
Types of Stocks
Penny Stocks - Small public companies trading at very low prices e.g Blumont @ $0.02
(A word of caution, shares like these are extremely volatile and their management may not be as stable and trustable as normal companies)
Blue Chip - Well-established, reliable and renowned stock e.g SIA
Real Estate Investment Trusts - These are stocks of companies that deal with, as the name suggests, real estates. 90% of these company's incomes are required to be acquired through rentals. It may either be shop space or office space that they are renting out.
E.g Suntec Reit (Retail + Office), Sabana Reit (Office) etc.
Warrants - This is an entirely different form of stock and requires a different execution tactic to gain profit. I shall elaborate on this in later posts.
Options - Similar to Warrants
Bonds - Provides fixed and constant interest payout every year. These payouts comes from the debts of the company. Bonds have a higher risk of going bankrupt as it is like loaning money to the company at the specific interest stated e.g SIA 2.15%b150930 Bonds also have maturity dates as you can see from the above example, SIA bonds pays out a yearly interest of 2.15% and this bond would mature on 30 Sept 2015.
Preference Shares - Similar to bonds, these type of shares provides a fixed and constant payout too. But what I prefer about preference shares rather than bonds is that in the scenario a company goes liquidated (bankrupt), they are liable to pay the Preference Shareholders money first as compared to even their main shareholders. Furtheremore, preference shares payouts can be as high as 7.5% a year!
Dividend
Dividend - Money companies distribute to shareholders as an incentive when they gain profits for that fiscal year. This may occur once, twice or four times a year depending on companies
Cum Dividend a.k.a CD - After announcing the results of the company, companies would usually provide dividends to shareholders. Following this announcement, there will be a CD beside the stock symbol. Depending on the results of the company, if it has a higher earning this year and decides to increase their dividends paid to shareholders, share prices would usually go up.
Books Closure - As long as you purchase the stock before this book closure date, you will be entitled to the dividend announced by the company.
Ex Dividend a.k.a XD - The day after the books closure date, XD would appear beside stock symbols. This means that should you decide to buy the stock now, you would not receive the dividends announced by the company.
Date Payable - This is the date when you should check your bank account for the dividend to be credited into your account.
Rights Issued - Occasionally, investors are given a choice to decide if they would like to receive the dividend in terms of monetary terms (cash) or shares. Picking shares may be a advantage / disadvantage depending on how much the dividend is but if you take up the rights issued, more shares would flood the market and this would dilute the share and in turn lead to a lower dividend per share in the future as there are more shares.
Other Terms
Halt a.k.a H - This sign would appear when there is a big announcement going to be made (in the case of Keppel Corp & Keppel Land) or when there is a sudden spike / decrease in price which SGX is required to investigate
Hope that this article has been of help to you all aspiring investors.
Shall blog on ways to pick stocks next time!
Signing Off~
Billy
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