The Second Month
loan
A loan in one country or currency which is backed by a loan in another country or currency to provide security against currency fluctuations.
backwardation
Where, in the futures market, the price for a future delivery is less than the cash price or spot price.
balance sheet
One of the two main accounting statements (the other is the profit and loss account) published at least annually by all companies. It lists all values of assets and liabilities as at a certain date (usually the financial year-end or the end of a quarter of such a year) and shows how this is represented by share capital, retained profit, etc.
ballot
A means of allocating shares on a random basis when an issue is oversubscribed.
Baltic Exchange
The London-based exchange where shippers and shipbrokers ply for cargo.
bargain
A purchase or sale on the Stock Exchange.
base rate
The rate, expressed as a percentage, decided by the banks from which most other rates used in lending are calculated.
basis point
The unit of an index. If an index increases from 300 to 306, it has increased by six basis points which, in this example, is equivalent to 2% .
bear
Someone who believes that share prices will fall. The opposite is a bull.
bear hug
An indication to the board of a target company that an offer is under consideration. See also strong bear hug and teddy bear hug.
bearer stock
A stock which has no registered owner, but is owned by whoever holds the certificate itself. Dividends are usually claimed by using coupons. These are fairly rare because of the inherent security problem.
bed and breakfast
The practice of selling an investment (or any other type of asset) very soon after buying it, either to realise a capital gain or to reduce the liability of capital gains tax by using the annual exemption.
benchmark
Notable achievement by a company expected to lead to an increase in its share price.
beneficial owner
The person entitled to the ultimate rights of an investment (or other property). A person who is the registered owner but not the beneficial owner is a nominee.
beta factor
The factor used to measure the movement of a particular share, or class of shares, independently from the movement of shares generally (measured by the alpha coefficient).
beta share
A share with a full listing but which is not traded enough to be an alpha share.
bid
Attempt at a takeover.
bid/offer spread
The difference between the buying and selling price. This difference is the turn or profit to the market-maker (or equivalent). It is in addition to his commission.
bid price
The price at which a market-maker (or equivalent) will buy back stock.
bid valuation
Where unit trust managers value bids and offers according to the actual sale cost of holdings within the fund. The usual practice within a unit trust is to match buyers and sellers. Bid valuation is needed when sales exceed purchases.
black book
A pre planned defence to a takeover bid.
blue button
Trainee market-maker, allowed to collect prices but not to transact bargains.
blue chip
A company or investment perceived as solid and reliable. Such a company will often be a well-established large company which is a household name and has enjoyed consistent growth.
blue chip out
Where a company does not seek a quotation of its own but is bought out by a blue chip company.
boiler room
High pressure sales techniques used to sell shares of doubtful worth. The term first arose in the Netherlands and made famous in the film “Boiler Room”. The film is a 2000 American drama film written and directed by Ben Younger, and starring Giovanni Ribisi
bond
Fixed interest security. Bonds are particularly popular with the Government.
bond washing
The practice of selling a bond cum dividend so that the accrued dividend is taxed as a capital gain rather than as income. The tax laws were changed in 2009 to render bond washing ineffective.
bonus issue
An issue of shares to existing shareholders in ratio to their existing holdings. It is usually either a means of capitalising retained profit or of splitting high valued shares into lower valued units. A bonus issue is also known as a scrip issue.
bonus share
Share issued in a bonus issue.
Book
Investments held to the account of a broker or investment manager for resale.
boot strap
A cash offer for a controlling interest followed by a lower offer for the rest of the target company's shares.
bought deal
A transaction which is done for a fixed fee rather than for turn or commission.
boutique
Financial service business operated from shop premises.
break-forward
A forward contract in the international money market which can be unwound at a predetermined rate. The holder can thus benefit from a currency movement in his favour, but sells some of the upside advantage to restrict his risk to the predetermined rate.
bridge financing
Short-term funding, usually to cover a short period while long-term funding is being organised.
bubble
Company whose high share price is due to hype rather than any intrinsic worth, think dotcom.
bucket shop
Broker who is not a member of a recognised stock exchange.
buffer
Unused credit or cash facilities.
bull
Someone who believes share prices will rise. If it is generally expected that share prices will rise, the market
is said to be bullish. The opposite to a bull is a bear.
bulldog
A security denominated in sterling but not issued by the UK government.
bullet
Fixed interest security with only one maturity date.
burn-out turnaround
Restructuring of a company which would otherwise go into liquidation.
burn rate
Rate at which a new venture uses up its venture capital.
Business Expansion Scheme
A scheme whereby generous tax incentives are given to
those who invest in private companies. The rules are complex, and the scheme is subject to many r
Next:
Want INSTANT TAX ADVICE?
Setting up in business | Legal Compliance | Keeping informed | Planning for profit | Raising finance |
| Managing growth | Buy, sell or merge | Minimising tax | Agreeing tax liabilities | Tax Rates 2024/26 | advice
Our Services
Business start-ups, Accounts Preparation, Tax Planning and Advice, Tax enquiry and investigations, Personal & Business Taxation including Income Tax, Self Assessment Tax, Coming into/Leaving the UK, Inheritance tax, Capital Gains Tax, Corporation Tax, National Insurance, PAYE, Value Added Tax Advice and Company Secretarial services
What a Demack Chartered Accountant can do for you?