STOCKS AND SHARES 2 PROFESSIONAL ENGLISH IN USE FOR FINANCE

 

PROFESSIONAL ENGLISH IN USE FOR FINANCE 30. STOCKS AND SHARES 2

 

A Buying and selling shares After newly issued shares have been sold (usually by investment banks) for the first time – this is called the primary market – they can be repeatedly traded at the stock exchange on which the company is listed, on what is called the secondary market. B New share issues Companies that require further capital can issue new shares. If these are offered to existing shareholders first this is known as a right issue – because the current shareholders have the first right to buy them. Companies can also choose to capitalize C Categories of stocks and shares Investors tend to classify the stocks and shares available in the equity markets in different categories. ·           Blue chips: stocks in large companies with a reputation for quality, reliability and profitability. More than two thirds of all blue chips in industrialized countries are owned by institutional investors such as insurance companies and pension funds. EXERCISES 30.1 Match the words in the box with the definitions below. Look at A and B opposite to help you.   to capitalize market price primary market own shares rights issue secondary market nominal value     1 new shares offered to existing shareholders 2 the price written on a share, which never changes 3 to turn profits into stocks or shares 30.2 Are the following statements true or false? Find reasons for your answers in A and B opposite. 1 Stocks that have already been bought at least once are traded on the primary market. 2 NASDAQ and the AIM have more regulations than the New York Stock Exchange and the London Stock Exchange. 30.3 Complete the sentences. Look at B and C opposite to help you. 1 A stock whose price has suddenly fallen a lot after a company had bad news could be a _______________, as it will probably rise again. 5 This stock used to considered an _______________, but two years ago the company started to cut its dividend and reinvest its cash in the business.

ANSWER KEY