Тема 7. Exchanges

VOCABULARY

an exchange – біржа; обмін

a stock exchange – фондова біржа

a commodity exchange – товарна біржа

a labour exchange – біржа праці

a rate of exchange – біржовий курс

an exchange business – біржова операція

a rule – правило

a broker – брокер

securities – цінні папери

a bond – облігація

a council – рада

a trading floor – торговий зал

a fixed rate – фіксований курс

an ordinary share – звичайна, проста акція

an installment – розстрочка

an exchange trade – біржова торгівля

a penny – пенні, пенс

a preference – пільга, перевага

a preference share – привілейована акція

a fixed income – фіксований дохід

to go bankrupt – збанкрутувати

in full – цілком, зовсім

a deal – частка; угода

to deal – мати справу; торгувати; розглядати;

to deal-out – розподіляти

unlisted securities – не допущені на біржу цінні папери

to be listed – бути допущеним на біржу

restructure – реорганізація

gilts (Gilt-Edged Securities = gilts) – цінні папери високої якості

a stock market – біржовий ринок

a redemption date – дата повернення боргу

a fund – резерв, фонд, запас

funds – капітал

to fund money – розміщувати гроші

to refund money – повернути гроші

spending – витрати

I

What is an exchange? It is an organised meeting of people in an appointed place to buy and sell. Certain rules govern the trading there and the members of exchange are called brokers.

There are the two types of exchanges known as the commodity exchange and the stock exchange.

Commodity exchanges were established with the aim of trading cotton, wool, timber, wheat, skins and many other commodities. Among well-known commodity exchanges are the Board of Trade in Chicago trading corn, the New York Coffee and Sugar Exchange. The world-known is British Metal Exchange trading metal, the Wool Exchange trading wool, Hatton Garden trading diamonds, Beaver House trading furs. The Baltic Exchange is a large grain market. In Japan there is the Tokyo Commodity Exchange for Industry.

Stock exchanges are such places where securities, stocks and bonds are sold and bought. It should be noted that the fluctuation of prices on exchanges influences the prices of various commodities on the world market.

The business of buying and selling on stock exchanges is called dealing, while a transaction is called a deal. The most famous stock exchanges are the New York Stock Exchange, the Royal Exchange in London, the Tokyo Stock Exchange, the Osaka Securities Exchange, the Australian Stock Exchange, the Sydney Futures Exchange and others.

The governing body of a stock exchange is, as a rule, the Council, which is elected by the members. A large stock exchange has the main trading floor in some large city and some other cities and towns. Say, the stock exchanges of the United Kingdom and the Irish Republic amalgamated in 1973. Since that time it is known as "The Stock Exchange". The main trading floor and central administration of it is in London, however, there are trading floors in Glasgow, Liverpool, Manchester, Birmingham, Dublin and Belfast.

II

Before you invest in the stock market, you need to know the meaning of a few basic terms. Let us consider them. What is a stock? The term "stock" means stock market holdings which pay a fixed rate of interest. But in day-to-day dealings, the words stocks, shares, equities and securities mean pretty much the same thing.

Ordinary shares. If you invest in the stock market, you will almost always be dealing with what are known as ordinary shares. You may come across some other types of shares. These include the following:

Partly-paid shares. Companies may issue partly-paid shares, which allow you to pay for the shares in installments. You can only sell partly-paid shares if all of the installments are up to date. If you miss an installment, you will lose your shares and any money you have already paid.

Penny shares. These are shares which have a low price. They usually cost less than 15 pence each. They can be very risky investments, but if the price rises you may make a great deal of money.

Preference shares. These shares earn a fixed income. You will receive any dividends before the people who hold ordinary shares in the same company. If a company becomes bankrupt, preference shareholders are paid first, after all the creditors have been paid in full.

Unlisted securities. Companies which are not big enough to be listed on the Stock Exchange, or which do not want to pay to be listed, can be sold on the Unlisted Securities Market (USM). The Stock Exchange restructured the USMinthemid 1990s.

Gilts. Gilts, or Gilt-Edged Securities, are securities issued by the British government which have a fixed rate of interest (usually for a set term) and are sold on the stock market. The money that they raise helps to fund government spending. They can be:

• longs, with a redemption date (date when the government pays back the money) more than fifteen years away;

• mediums, with a redemption date between five and fifteen years away;

• shorts, with a redemption date of five years away or less.