Financial lexicon

S&P500

(Standard & Poor's 500). Index comprising 500 securities listed on the NYSE, including 400 industrial, 40 service, 20 transport and 40 financial securities.

Scrip certificate

A scrip certificate provides a means of acquiring a share or bond at a fixed price in advance and during a specific period. With this commitment there is no obligation to buy.

Secondary market

Once they have been issued on the primary market, securities may be freely negotiated on the secondary market.

Sectoral index

Index comprising the securities in the same sector, such as the automobile sector, so a comparison can be made of how a security performs in relation to the whole sector.

Self-financing capacity (financing from

Self-financing capacity reflects a company's ability to finance itself from its own resources. It is based on the net profit plus charges to depreciations and certain provisions.

Sensitivity

Impact of a change in interest rates for a bond price. Example, if the sensitivity of a bond is 5 and its price is 5,000 F, an increase (decrease) in the rates equal to 1% will lead to a fall (increase) in the bond price equal to 5 x 1 % x 5, 000 F, that is, 250 F.

Share

Deed of property representing a proportion of a public limited company's capital and entitling the holder to vote during meetings, to a share of the profits and to be kept informed about the company's activities.

Share account

Account open with a financial institution and designed to accommodate a portfolio of securities.

Shareholder

Someone who invests in a share. Generally speaking there are two types of shareholder: those who invest in long-term securities and have an interest in the future of a company and those who buy shares to take advantage of a temporary opportunity

Short

To have a short selling position means being a short seller.

Short position

Position where an investor sells on the market.

Short term

A short-term operation is one that has to be concluded within two weeks and no later.

Short-term rates

Rates applied to investments and borrowings carrying a term of less than 12 months.

Sicavs

Investing in funds allows investors to benefit from specialist's skills in asset management. These funds, consituted of multiple investments from a large number of clients, are managed as a single, broadly diversified portfolio in order to limit risks linked to individual stocks as much as possible.

Small caps

Shares of small companies with a low level of market capitalisation.

Speculation

Financial operation where advantage is taken of market volatility by buying and selling securities within a short space of time.

Speculative bubble

"Excessive increase in prices, which then become disconnected from economic fundamentals. A bubble is considered an advance warning of a sharp compensatory fall, where the bubble is said to have ""burst""."

Split

Operation where the nominal value of a share is divided and their number if multiplied so as to improve the liquidity for this security.

Spot market

The spot market is where operations are settled straightaway. Short selling or buying is not allowed.

Start-up

Company just getting underway.

Stock exchange

Organised and regulated market where investors buy and sell securities. These investors can be Belgian and non-Belgian banking and financial organisations and also private individuals.

Stock exchange index

Basket of representative market shares for measuring the market's overall performance The « BEL 20 »index, for example is the reference index for the Brussels Stock Exchange.

Stock Exchange Operations Committee (SOC

Body in charge of monitoring the financial market, verifying the transparency of information about companies going public, stepping up the level of protection for public savings and avoiding insider trading activities.

Stockbroking firm

Commercial company whose remit is broking securities and ensuring the liquidity of markets.

Stop order

Also called stop-loss order, this order offers protection or advantage from a market reversal. The principal offers to buy or sell after a designated price is reached (stop point).

Stop-loss order

This is used to set a maximum loss target without having to forgo favourable price trends.

Strike price

Price where an option, warrant or a derivative product can be exercise.

Strip VVPR

The strip represents the tax advantage of the VVPR shares ( which give the advantage that the deduction at source on the dividends will be reduced till 15 % ).Through this system the investors can acquire strip sheets for their ordinary shares as to benefit from the tax advantage. The shareholder must present (before the end of November) simultaneously the coupon of the share ( ordinary or old VVPR transformed into an ordinary share ) and the coupon of the strip sheet carrying the same number to benefit the deduction at source of 15 % . After the 30th of November, the strip VVPR loses its value and only the ordinary dividends with deduction at source of 25 % will be payed.

Subscription right

Negotiable right attached to each share thereby allowing a shareholder a pre-emptive right to subscribe during a capital increase.

Subsidiary

Company directly or indirectly controlled by and linked to a company holding a share in the capital.

Support

Graphic threshold setting the theoretical limit to a price fall for a security or market. It therefore represents a target for which operators, not expecting a greater fall, will decide to purchase a security.