Q-S

The Investment Research Partnership

Q-S

Q R S

QCBS	*Qualifying Corporate Bonds* - Uk corporate bonds issued in sterling without conversion rights. QCBs are free of capital gains tax (CGT).

Quoted Currency	The currency whose value is expressed in terms of one unit of the base currency. The quoted currency would be currency Y for the X/Y exchange rate.

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Redeemable Security	A security issued with a known maturity, or redemption date.

Redemption yield	The average annual return offered by a security (usually a bond) taking into account not only interest payments but amortisation of any current discount or premium to its redemption value (see IRR)

Registrar	The institution (usually a bank) responsible for maintaining an up-to-date register of shareholders, issuing share certificates and handling dividend payments and company notices.

Regression Analysis	A statistical technique used to establish the degree of correlation that exists between two variables.

Reinvestment Risk	The inability to reinvest coupons at the same rate of interest as the Gross Redemption Yield (GRY). This in turn makes the GRY conceptually flawed.

REPO	The sale and repurchase of bonds between two parties: the repurchase being made at a price and date fixed in advance. Repos are categorised into general repos and specific repos.

Resistance Level	A term used in Technical Analysis to describe the ceiling put on the price of a security resulting from persistent investor selling at that price level.

Rights issue	An issue of new shares by a company, wherein existing shareholders have a pre-emptive right to purchase (often at a discount) additional shares in the company.

RPI	*Retail Price Index* - an expenditure weighted measure of UK inflation based on a representative basket of goods and services purchased by an average UK household.

Running Yield	The return from a bond calculated by expressing the coupon as a percentage of the clean price. Also known as the Flat Yield or interest yield.

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S & P 500 index	S & P 500 index. The Standard and Poor's rating agency's index covering the 500 largest US companies by market value, also known as the S & P Composite.

SARS	Substantial Acquisition Rules - those rules administered by the panel on Takeovers and Mergers (POTAM) that apply to companies listed on the London Stock Exchange and those admitted to the Alternative Investment Market (AIM) or (OFEX) which prevent potential bidders from launching a dawn raid on the target company to 29.0%, before announcing a formal non-mandatory bid.

Scrip issue	An issue of new shares by a company, where the company uses reserves to subscribe for the new shares, which are made available to existing shareholders at no cost.

SEAQ (Seaq)	UK Stock Exchange Automated Quotation system - used for some, but mainly smaller, UK securities.

SEATS Plus	*Plus Stock Exchange Alternative Trading Service* - the London Stock Exchange's electronic order driven bulletin board for trading less liquid securities, notably those fully listed or AIM shares with less than two registered market makers.

Secondary Market	The market for trading securities already in issue.

Securities	General name applied for all investment type products which are quoted or traded on the financial markets. The name encompasses bonds, stocks, shares, rights, warrants, derivatives and financial instruments of all types.

Securitisation	The packaging of rights to the future revenue stream from a collection of assets into a bond issue.

SEDOL (Sedol)	*Stock Exchange Daily Official List* – this is a record of all transactions effected for all securities listed on the London Stock Exchange. It also includes details of dividend dates, rights issues and prices.

Settlor	The creator of a trust.

SETS (Sets)	*Stock Exchange Electronic Trading Service* – the order-driven computerised dealing system introduced in October 1997 when the UK stock market moved from a quote-driven market to an order-driven market to come in line with most other major stock exchanges. It has largely replaced SEAQ in the larger and more liquid stocks where an order book is more visible.

Settlement day	The day on which an executed market bargain must be settled, either through delivery of stock or money. In market terminology, this is termed as T + X, where x is the number of days until settlement is due.

Share Buyback	The redemption and cancellation by a company of a proportion of its irredeemable ordinary shares subject to the permission of the High Court and agreement from the Inland Revenue.

Share Capital	The Nominal Value of a company's Equity or Ordinary Shares. A company's authorised share capital is the Nominal Value of Equity the company may issue whilst issued share capital is that which the company has issued. The term share capital is often extended to include a company's preference shares.

Share Split	A method by which a company can reduce the market price of its shares to make them more marketable without capitalising its reserves. a share split simply entails the company reducing the nominal value of its share capital. A share split should have the same impact on a company's share price as a Bonus Issue.

Short position	A situation where a trader has sold more shares in a company than he owns in expectation of a price fall. He will then plan to cover the position (i.e. to buy the shares he owes) at a lower price and realise a profit, assuming the price does actually fall.

Spot Rate	A compound annual fixed rate of interest that applies to an investment over a specific time period. Also known as Forward Rate.

Spread	The difference between bid and offer (buy and sell) prices in a security.

Stamp duty	The UK tax on the purchase of UK shares. This includes stamp duty reserve tax.

Standard Deviation	A measure of dispersion. In relation to the values within a distribution, the standard deviation is the square root of the distribution's variance.

Stock Exchange	An organized market place for issuing and trading securities by members of that exchange.

Stocks	A term used to describe securities generally, but more often applying to fixed income or bond securities.

Strike Price	The price at which the right conferred by an Option can be exercised by the holder against the writer.

Stripped bond	A bond created from an underlying security (the “host bond”) where all coupons have been stripped out.

Subordinated Loan Stock	Loan Stock issued by a company that ranks above its Preference Shares but bellow its unsecured creditors iN the event of the company's liquidation.

Swaps	An exchange of payments between two parties either directly or through an intermediary. For example, an interest rate swap agreement involves one party, who holds a fixed interest security, exchanging future fixed income payments for floating income payments, which would ordinarily be payable to the other party, who holds a floating rate security. The advantage is that neither party has to alter their security holding to obtain the desired income stream.

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