Corporate report that can influence the share price. According to § 15 of the Securities Trading Law (Wertpapierhandelsgesetz, WpHG), stock corporations are obliged to publish ad-hoc reports on such occasions.
Analyst
A professional assessor of the investment quality, value, and price development of financial and capital investments.
Analyst rating
Assessment of securities by analysts - usually from large banks -
leading to recommendations for or against purchasing. The best-known
ratings are: strong buy; buy; hold; sell; strong sell. Other terms
include accumulate, under-performer, out-performer, and
market-performer.
Ask (asked price)
Price at which a financial instrument is offered for sale.
Associates
Legally independent companies in accordance with § 15 of the German
Stock Corporation Act that are connected to different degrees of
intensity. This includes simple majority holdings, independent and
controlling companies, corporate groups, cross-shareholding companies,
associated companies, and integrated companies.
Bearer share
Type of share which only changes ownership by means of transfer posting at the banks and the clearing house.
Bear market
Name for a negative development in stock markets that is expressed in a
similarly negative price development. It can extend to all markets or
just submarkets.
Blocking minority
If one individual or a group of stockholders holds a share of more than
25 per cent but less than 50 per cent of the stock of a company, then
this person or group can prevent General Meeting decisions that require
a 75 per cent majority.
Blue chip
Stock market name for internationally known standard shares of top
quality that, due to their earnings and substance, are considered to be
particularly safe (conservative) investments. They take their name from
the blue chips (the most valuable ones) in American poker.
Bond
Long-term loan against debenture bonds. In the bond issue terms, the
bond issuer agrees on specific payments, usually to pay back cash
loaned as well as to pay interest due on specific dates.
Book-building margin
Price range of a share defined on the occasion of a company going
public. Interested parties can submit their subscription offers within
this pre-defined range.
Bull market
Name for a positive development in stock markets that is expressed in a
similarly positive price development. It can extend to all markets or
just submarkets.
Common stock
The most common type of share in Germany. Common stock guarantees
owners the rights listed in the German Stock Corporation Act, such as
the right to vote.
Convertible bond
Bond of a stock corporation that gives the holder the right, but not
the obligation, to exchange it at a later date or within a future
period of time for shares in the company, based on a specific ratio,
possibly against additional payment.
Cash flow
Key company figure which represents the surplus funds: Net income plus depreciation plus change in long-term provisions.
Cash flow statement
Instrument used in the context of financial analysis to investigate the
causes of changes in the company's cash holding. This is done by
entering all liquid funds as well as the flows of incoming and outgoing
payments.
Charts
Graphical representation of long number series for listed values
(securities, foreign exchange, goods) and indices (index performance of
a value, an industry, or an overall market).
Current price
The price on the day on which a security is purchased or sold.
DAX
Abbreviation for Deutscher Aktienindex (German share index). The DAX
includes the prices of 30 standard shares. Representing around 70 per
cent of the capital permitted on the stock market and more than 80 per
cent of the exchange transactions in German shares, it is the most
popular indicator of price development on the German stock market.
Day order
Limited stock market order whose validity period is fixed to a certain day.
Demand price
Name of the price at which demand exists.
Depositories
Institutions at which the stockholders have deposited their shares for
the purpose of participating in the General Meeting. The shares must be
deposited as required before the holders can exercise their voting
rights.
Directors' dealings
Securities transactions by members of the Managing Board and
Supervisory Board of a company listed on the stock exchange; according
to the guidelines for the Neuer Markt, such transactions have had to be
disclosed since July 1, 2002.
Discount
Price markdown on the nominal value of a bond or a loan amount.
Dividend
Distribution of a stock corporation's profits. These are usually distributed per investment fund share (=share).
DVFA income
Scheme designed by the German Association for Financial Analysis and
Asset Management (Deutsche Vereinigung für Finanzanalyse und Asset
Management, DVFA) for calculating a company's annual net income in
order to allow comparison of different years or different companies.
Earnings per share
Key figure for valuing and assessing shares which allows a judgement to
be made concerning a company's profitability; calculated as annual net
income divided by number of shares.
EBIT
Earnings Before Interest and Taxes: This can be found in the statement
of income and may also be referred to as "Income from operations".
EBITDA
Earnings Before Interest, Taxes, Depreciation and Amortization: EBITDA
is used internationally and is one of the most transparent indicators
of success for assessing the strictly operative profitability of a
company. It is made up - by back calculation - of the EBIT, the net
interest income and depreciation.
Economic value added (EVA)
Variable that demonstrates to what extent a decision will create or destroy assets for the company.
Equity
Funds with which a stock corporation is liable to its creditors.
Equity story
A corporate concept published by a company when going public or when
increasing capital. Moreover, it constitutes one of the essential
determinants for issue price determination.
EURIBOR (European Interbank Offered Rate)
Interbank money rate for 1 week and 1 to 12 one-month loans. As of
January 1, 1999, the national reference interest rates in euro
countries - such as FIBOR (Frankfurt Interbank Offered Rate) - have
been replaced by the EURIBOR interest family. The EURIBOR rates form
the respective reference values for most variable bonds as well as the
negotiated variable credit agreements in the EU.
Executive Board
One of the three bodies of a stock corporation, alongside the General
Meeting and the Supervisory Board. The Executive Board represents the
stock corporation externally and manages business internally. It
therefore has sole representative power and management authorization.
The Executive Board is made up of one or more individuals who are
appointed by the Supervisory Board and are responsible for managing the
company.
Floor trading system
Securities trading between brokers and traders in person which takes place "on the floor" of the stock market building.
Forward transactions
Contracts concerning purchase or sale, for example of securities, where
the time at which the contract is concluded differs from the time when
the security transaction is performed.
Free float
The portion of the shares of a listed company which is traded freely on the stock market.
Fund
Investor assets that are managed by capital investment companies or
investment companies. These companies invest the investors' capital in
shares, pensions, or real estate.
Future
Forward contract in which the buyer and seller commit themselves to
deliver or accept a specific quantity of a base value at a fixed price
upon the due date.
General meeting
Body of a stock corporation. In the general meeting, the shareholders,
unless laws stipulate otherwise, exercise their rights in the affairs
of the stock corporation. The general meeting makes decisions in the
cases that are expressly determined in the law and Articles of
Association in accordance with § 118 of the German Stock Corporation
Act. This includes the appointment of members of the Supervisory Board,
giving discharge to the Supervisory Board and Executive Board,
appointment of the accountant, appropriation of net retained profits,
amendments to the Articles of Association, as wells as measures for
capital procurement and decreasing capitalization.
General standard
Alongside the prime standard, this is one of the two stock market
segments introduced with the stock exchange rules changed on January 1,
2003 and the resulting restructuring. The minimum national legal
requirements apply in the general standard. The rules are binding for
all issuers on the Frankfurt Stock Exchange.
Greenshoe
Option allowing a consortium bank to release additional securities of
the company for which it is responsible onto the market as part of a
new issue. This option is primarily used when demand for the issued
shares clearly exceeds the planned issue volume.
Hedging
To hedge = to limit. Market participants conclude an option or forward
transaction to minimize their rate, currency, and price risks.
IFRS
The International Financial Reporting Standards (IFRS) are a collection
of standards and interpretations that are not legally binding,
developed by an independent private committee, the International
Accounting Standards Board (IASB). They aim to harmonize accounting
practices in various countries in order to improve transparency and
facilitate comparison. These standards and interpretations list rules
on external company accounting. The International Financial Reporting
Standards comprise the International Financial Reporting Standards
(IFRS), the International Accounting Standards (IAS), the
interpretations of the International Financial Reporting
Interpretations Committee (IFRIC), and the interpretations of the
Standing Interpretations Committee (SIC).
Index fund
Investment fund that is structured in such a way that it corresponds to a generally recognized stock market index.
Individual share certificate
Share that is based on part of the capital of a stock corporation. For
genuine individual share certificates, the number is laid down in the
Articles of Association. Non-genuine individual share certificates
(no-par-value stocks) are issued on a particular fraction of the
capital and exist as no-par-value stocks with or without the quota
stated on the stock.
Issue rate
Price at which a newly issued security is offered to potential capital investors for drawing.
Key interest rates
Common name for the discount rate and Lombard rate set by the Bundesbank.
Limit
Price limit for purchase orders and sales orders.
Market capitalization
Current market value of a company listed on the stock exchange: Share price multiplied by number of shares.
Nominal value
The part of a share that represents the company's registered capital;
for fixed-interest securities, this is the amount that the issuer
(distributor of the bond) must pay back to the holder at the end of the
maturity period.
Ninety-day line
A moving average line that is important for technical share analysis.
It is formed from the average prices on the last ninety stock market
days. If the current price rises from below this line to above it, this
is valuated as a signal to buy. In contrast, it is valuated as a signal
to sell if the price falls from above the line to below it.
NYSE
Abbreviation for New York Stock Exchange (Wall Street). The most
important stock market in the world. Formed in 1792. Floor trading
system with market segments for cash transactions and forward
transactions.
Option
Purchase or sale of the right to accept an offer to buy or sell within a fixed period of time.
Offer price
Name of the price at which an offer exists.
Order
Another term for purchase orders or sales orders on a stock exchange.
Penny stocks
Highly speculative American shares with prices between fractions of a cent and a few dollars.
Premium
Price markup on the nominal value of a security or the parity rate of
foreign exchange: nominal value or parity + premium = price.
Price-earnings ratio (PER)
Current market price divided by earnings per share. The PER allows
statements to be made regarding the way in which various shares from a
particular industry are valued on the stock market.
Prime standard
Alongside the general standard, this is one of the two stock market
segments introduced with the stock exchange rules changed on January 1,
2003 and the resulting restructuring. In the prime standard, the
issuers must meet international transparency requirements that go
beyond those of the general standard. These include quarterly reports,
international accounting standards (IAS or US GAAP), presentation of a
company calendar, at least one analysts' conference each year, as well
as ad-hoc disclosures and regular reporting also in English.
Profit warning
Declaration of a company listed on the stock market that the profit
originally expected will not be achieved; must be published in the form
of an ad-hoc report.
Rate cash flow ratio
Share price divided by cash flow per share. Key figure that
demonstrates the relationship between the share price and the
underlying performance-based potential.
Rating
Opinion, expressed in symbols, of agencies specializing in
creditworthiness analyses with regard to the economic ability and legal
commitment of an issuer to meet all due payment obligations and/or due
payment obligations associated with a specific financial title
completely and on time.
Real-time prices
Quotations which the stock exchange displays on price screens or other terminals without delay.
Registered share
Share registered in the name of the owner.
Return on investment (ROI)
Key commercial key figure (financial profitability). The ratio between profit and total assets.
Securities and Exchange Commission (SEC)
Securities and stock exchange supervisory authority in the USA that monitors the entire international market.
Security identification number (SID)
Six-digit number which is used to uniquely identify all traded shares and other securities.
Share
Shares (also referred to as stock) break down the share capital of a
stock corporation into smaller parts and at the same time evidence
ownership of holders' rights in the stock corporation. According to §8
paragraph1 of the German Stock Corporation Act, the shares can be
either par-value shares or individual share certificates.
Share buy-back
Under certain circumstances, stock corporations may buy back their own
shares. Shares may be bought back for various purposes. One of the most
important reasons is to increase the share price of the shares
remaining on the free market.
Shareholder value concept
Concept representing the sole orientation of management towards the
interest of shareholders, with the aim of maximizing market value.
Share index
Key figure that, usually every day of trading on the stock market,
reflects changes in share prices (several or all) over the course of
time based on a randomly set base value. Share indexes can comprise the
entire market (overall index) or just individual industries (industry
index).
Small caps
Shares of small stock corporations traded on the stock market. The name is an abbreviation of small capitalized.
Split share
Arises when shares are increased by exchanging the old shares for a
larger number of new shares (split shares) whose nominal values or unit
values are reduced accordingly.
Stagflation
Stagnation of economic growth coinciding with inflation.
Stakeholder value
Concept of company management that is considered to be the opposite of
shareholder value. This entails the company management considering the
interests of all entitlement groups connected to the company - such as
management, employees, buyers, vendors, creditors, and the state - when
making decisions.
Stock option
The right, acquired by paying a premium, to buy (call) or sell (put) a
specific number of shares at a specific pre-defined price within a
specific period or on a specific date in the future.
Stock option plan
Model that allows for a company's managers to be given stock options in
the company without remuneration or subject to preferred conditions.
Stock split
Division of a share into two or more parts. The main purpose of such a
measure is to reduce the price of the individual share and make it
easier to handle.
Stock voting right
Voting right of the stockholders. The most important management right
enjoyed by individual stockholders that can be executed based on
membership and autonomously. In general, every share grants a voting
right that is exercised based on principle share values or, in the case
of individual share certificates, based on the number thereof.
Supervisory Board
Body of a stock corporation. The Supervisory Board monitors the
management of the stock corporation, appoints members of the Executive
Board, calls a General Meeting in special circumstances, and represents
the company legally against the Executive Board.
Treasury stock
Shares issued by a stock corporation that it holds itself. According to
§71 paragraph 1 of the German Stock Corporation Act, the company may
only purchase treasury stock under certain conditions listed there.
US GAAP
United States Generally Accepted Accounting Principles: American
accounting standards which are not legally binding in the USA but are
officially recognized and valid.
Venture capital
Name for equity that is made available by means of a specialized
company (venture capital fund) to young companies that cannot finance
their growth from their own funds and receive no or insufficient credit
from banks due to a lack of collateral.
Volatility
Measure of the degree of fluctuation and thus the price risk of a
security over a particular period. The term is often also used
generally for market price and interest rate fluctuations.
Working capital
Key figures for assessing the liquidity of a company. Defined as
surplus of the short-tem assets (can be converted into cash within a
year) over the short-term liabilities of a company.
Fully electronic international trading platform of Deutsche Börse AG. Market participants with global operations (institutional investors and private investors) can trade any amount of any of the stocks, bonds, and warrants listed on the Frankfurt stock exchange using XETRA.