Vocabulary

stock market	фондовый рынок
origin	происхождение, (зд.) начало, зарождение
principal	главный
intermediation	посредническая деятельность
transferable securities	ценные бумаги, которые могут быть переуступлены другому лицу
expansion	расширение
facilities	(зд.) услуги
sophisticated	(зд.) сложный, более современный
draw up	составлять (документ)
orderly	упорядоченный
increasingly	все больше и больше
integrate	интегрировать, объединять
communications	средства связи
allow	позволять, делать возможным
barrier	барьер, препятствие
isolation	изоляция, обособление
lead	приводить (к чему-л.)
internationalisation	интернационализация (экономики, капитала)
force	вынуждать, заставлять
cross-border trading	международная торговля
equity	(зд.) обыкновенная акция
arbitrage	арбитражные операции
emerge	возникать
advanced countries	развитые страны
over-the-counter market	внебиржевой рынок
governing body	руководящий орган
in contrast to	в противоположность (чему-л.)
network	сеть
dealer	дилер, биржевой торговец
for smb's account	за чей-л. счет
retail client	мелкий клиент
conduct	(зд.) руководить, управлять
quotation	котировка
list	вносить в курсовой бюллетень
preferred stocks	привилегированные акции
listing	допуск ценной бумаги к официальной торговле на фондовой бирже
share index	фондовый индекс
indication	показатель
segment	сегмент (рынка)

a. Stocks and Shares. Read the following text and then decide whether the statements following are TRUE or FALSE:

The act of issuing shares (GB) or stocks (US) - i.e. offering them for sale to the public - for the first time, is known as floating a company or making a flotation. Companies generally use a bank to underwrite the issue. In return for a fee, the bank guarantees to purchase the security issue at an agreed price on a certain day, although it hopes to sell it to the public. Newer and smaller companies trade on "over-the-counter" markets, such as the Unlisted Securities Market in London. Successful companies can apply to have their shares traded on the major stock exchanges, but in order to be quoted (GB) or listed (US) there, they have to fulfil a large number of requirements. One of these is to send their shareholders independently-audited annual reports, including the year's trading results and a statement of the company's financial position. Buying a share gives its holder part of the ownership of a company. Shares generally entitle their owners to vote at companies' General Meetings, to elect company directors, and to receive a proportion of distributed profits in the form of a dividend (or to receive part of the company's residual value if it goes into bankruptcy). Shareholders can sell their shares at any time on the secondary market, but the market price of a share - the price quoted at any given time on the stock exchange, which reflects how well or badly the company is doing - may differ radically from its nominal, face, or par value.

At the London Stock Exchange, share transactions do not have to be settled until the account day or settlement day at the end of a two-week accounting period. This allows speculators to buy shares hoping to resell them at a higher price before they actually pay for them, or to sell shares, hoping to buy them back at a lower price.

If a company wishes to raise more money for expansion it can issue new shares. These are frequently offered to existing shareholders at less than their market price: this is known as a rights issue. Companies may also turn part of their profit into capital by issuing new shares to shareholders instead of paying dividends. This is known as a bonus issue or scrip issue or capitalisation issue in Britain, and as a stock dividend or stock split in the US. American corporations are also permitted to reduce the amount of their capital by buying back their own shares, which are then known as treasury stock; in Britain this is generally not allowed, in order to protect companies' creditors. If a company sells shares at above their par value, this amount is recorded in financial statements as share premium (GB) or paid-in surplus (US).

The Financial Times-Stock Exchange (FT-SE) 100 Share Index (known as the "Footsie") records the average value of the 100 leading British shares, and is updated every minute during trading. The most important US index is the Dow Jones Industrial Average.

1. A company can only be floated once.

2. Banks underwrite share issues when they want to buy the shares.

3. It is easier for a company to be quoted on an unlisted securities market than on a major stock exchange.

4. Unlisted companies do not publish annual reports.

5. The market price of a share is never the same as its nominal value.

6. On the London Stock Exchange it is possible to make a profit without ever paying anyone any money.

7. If a company issues new shares, it has to offer them to existing shareholders at a reduced price.

8. A scrip issue can be an alternative to paying a dividend.

9. American corporations with large amounts of cash can spend it by buying their own shares.

10. Companies do not have to sell their shares at their nominal value.

b. Add appropriate words from the text to these sentences:

1. Offering shares to the public for the first time is called … a company

2. A company offering shares usually uses a merchant bank to … the issue.

3. The major British companies are … on the London Stock Exchange.

4. In London, share transactions have to be … every two weeks.

5. The value written on a share is its…

6. The value listed in the newspapers is its…

c. Complete the sentences using these words:

Arbitrageurs, bears, bulls, insiders, market-makers, shareholders, stags, stockbrokers

1. People who buy stocks and shares are called.......... in Britain, and stockholders in the USA (although most of the shares of all leading companies are held by institutional investors such as pension funds and insurance companies).

2. People who buy securities expecting their price to rise so they can resell them before the next settlement day are known as...........

3. People who sell shares hoping to buy them back at a lower price before the next settlement day are called...........

4. People who buy new share issues, hoping to resell them at a profit (if the issue is over-subscribed) are known as...........

5. Shareholders place their orders with, and sometimes seek advice from........... who are members of the Stock Exchange, but who can work anywhere with a telephone and a computer screen connected to the Stock Exchange.

6. Brokers in turn buy shares from and sell them to........... who are wholesalers in stocks and shares, and who guarantee to make a market at all times with brokers.

7........... are people who occupy a position of trust within an organisation and possess information not known to the public; buying or selling shares when in possession of such information that affects their price is illegal.

8........... are people who buy stakes in companies involved (or expected to be involved) in take-over bids.

d. Types of shares:

A share (in British English) or a stock (in American English) is a security representing a portion of the nominal capital of a company. (In Britain "stock" is used to refer to either a block of shares with a nominal value of £100, or various kinds of fixed-interest securities.)

Complete the following using the phrases in the box:

Barometer stocks, blue chips, defensive stock, deferred shares, equities,

growth stock, mutual fund, ordinary shares, participation certificates,

preference shares or preferred stock

1. Another name for stocks and shares is........... because all the stocks or shares of a company — or all those of a particular category — have an equal nominal value.

2........... (US: common stock) are often the only kind of shares with voting rights.

3. Some companies issue.......... which, like shares, grant their holders part of the ownership of a company, but usually without voting rights.

4............ as their name suggests, usually receive a fixed dividend, which must be paid in full before any dividend is paid on other shares. But because interest payments are tax deductible, and dividends are not, many companies now issue bonds instead.

5........... (or stock), again as the name suggests, do not receive a dividend until other categories of shares have had a dividend paid on them, but might earn a higher dividend if the company does well.

6. Securities in companies that are considered to be without risk are known as...........

7. Widely-held stocks (e.g. blue chips or 20-year Treasury Bonds) that can be considered as indicators of present and future market performance, are known as.......... (GB) or bellwether stocks (US).

8. А.......... or share is one that is expected to appreciate in capital value; it usually has a high purchasing price and a low current rate of return.

9. A.......... or income stock or share is one that offers a good yield but only a limited chance of a rise or decline in price (in an industry that is not much affected by cyclical trends).

10. A way of spreading risks is to invest in a unit trust (in Britain) or a.......... (in the US), organisations that invest small investors' money in a wide portfolio of securities.

e. Market Price Idioms. Classify the following expressions according to whether you think they mean:

(a) the price rose a little;

(b) the price rose a lot;

(c) the price fell a little;

(d) the price fell a lot;

(e) the price was almost unchanged.

1. After early losses, the Dow Jones rallied to finish ten points up.

2. Boeing shares plummeted after a door fell off a 747 taking off from Dulles International Airport and landed in the White House garden.

3. Chrysler continued to drift, finishing 75 cents down at 45 and a half.

4. CIBA-Geigy shares rocketed after the company announced the discovery of a drug that will cure people of wanting to make a fortune on the stock market.

5. Compaq stock suffered a small setback, losing $2.25.

6. EuroDisney shares sank again to FF2.35 after Mickey got caught in a mousetrap.

7. Eurotunnel shares went through the floor, finishing at 0.14.

8. Gold slipped back a little to $385.40.

9. Hill-Lewis shares took a knock, after the news that company chairman Stuart Tipping had resigned.

10. IBM stocks suffered a drop after disappointing quarterly results were released.

11. In Frankfurt, the DAX index failed to halt its slide, finishing 6 points down.

12. In Lisbon, shares were slightly weaker in light trading.

13. In Milan, shares eased slightly in subdued trading.

14. In New York, the Japanese yen slumped to 123 to the dollar.

15. In Paris, the CAC-40 recovered slightly, finishing up by 0.32%.

16. In the Philippines, shares took a tumble in heavy late trading, with the Manila Composite Index closing at 2507.33.

17. In Tokyo, shares rebounded, the Nikkei closing at 20677.83.

18. In Hong Kong, the Hang Seng Index plunged to 8269.44.

19. On Wall Street, most of the leading stocks were firmer.

20. Philip Morris also dipped, down 75 cents to $52.75.

21. Shares fell sharply across the board in Jakarta this morning.

22. Shares of Tottenham Hotspur Football Club crashed to a record low of 16p after the team lost their fourteenth successive home game on Saturday.

23. Silver was steady at six hundred and thirty-five cents an ounce.

24. The Deutschmark jumped after the weekend's election results, finishing at 0.598 against the dollar.

25. The dollar was slightly stronger in active trading yesterday.

26. The Dutch guilder leapt to an all-time high after gold was discovered in the mountains outside Amsterdam.

27. The pound revived a little, finishing 2 pfennigs up.

28. The Swiss franc advanced a little to 2.14.

29. Thirty-five points were wiped off the Footsie as shares took a beating in London.

30. Volkswagen staged a comeback, finishing up 14.

Now underline all the "up" and "down" phrases in the examples.

f. Rise and Fall. Classify these verbs (from the sentences in the previous exercise), according to whether they mean rise or fall:

advance	be firm	be strong	be weak
dip	drift	drop	ease
jump	leap	plummet	plunge
rally	rebound	recover	revive
rocket	sink	slip	slump
tumble