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Financial Market Jargon Buster

Financial  Market Jargon Buster

A financial market is a market that brings buyers and sellers together to trade in financial assets such as stocks, bonds, commodities, derivatives and currencies. The purpose of a financial market is to set prices for global trade, raise capital and transfer liquidity and risk. Although there are many components to a financial market, two of the most commonly used are money markets and capital markets.

Stock : A stock is a type of security that signifies ownership in a corporation and represents a claim on part of the corporation’s assets and earnings.

Derivatives :  A derivative is a security with a price that is dependent upon or derived from one or more underlying assets. The derivative itself is a contract between two or more parties based upon the asset or assets. Its value is determined by fluctuations in the underlying asset.

Comodities : It is any useful or valuable thing, especially something that is bought and sold. Grain, vegetables, and precious metals are commodities.

Venture capital : Venture capital is financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.

Domiciliary account : This is an account that allows you save in US Dollars, Pounds Sterling or Euro; with your money valued at the prevailing exchange rate.

Bond: A bond is a debt investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate. Bonds are used by companies, municipalities, states and sovereign governments to raise money and finance a variety of projects and activities.

Equity : Equity is the value of an asset less the value of all liabilities on that asset.

Bank Equity : The bank capital represents the value of a bank’s equity instruments that can absorb losses and have the lowest priority in payments, if the bank liquidates.

Stock Trading : A stock trader or equity trader or share trader is a person or company involved in trading equity securities. Stock traders may be an agent, hedger, arbitrageur, speculator, stockbroker or investor.

Libor :  Libor stands for London interbank offered rate. The interest rate at which banks offer to lend funds (wholesale money) to one another in the international interbank market. Libor is a key benchmark rate that reflects how much it costs banks to borrow from each other.

Money market : Money market is basically refers to a section of the financial market where financial instruments with high liquidity and short-term maturities are traded.

Capital market : Capital markets are markets for buying and selling equity and debt instruments.

Financial securities :A security, in a financial context, is a certificate or other financial instrument that has monetary value and can be traded.

Futures : Contracts for assets (especially commodities or shares) bought at agreed prices but delivered and paid for later. It is a tradeable financial contract.

Debt Instrument : A debt instrument is a paper or electronic obligation that enables the issuing party to raise funds by promising to repay a lender in accordance with terms of a contract.

Financial Instrument : Financial instruments are assets that can be traded.

Financial Cap : An upper limit (same as ceiling), or to set an upper limit. In finance, this is normally used with respect to interest rates

Growth stock – The basic idea behind a growth stock is that you want to buy it when it’s not worth much and then sell it when it’s worth a lot.

 

Mutual funds : A mutual fund is nothing more than a collection of stocks and/or bonds. You can think of a mutual fund as a company that brings together a group of people and invests their money in stocks, bonds, and other securities.

Treasury Instrument : Treasury bonds, bills and notes are also known as Treasury instruments. In finance, an instrument is a real or virtual document that represents a legal agreement having a monetary value, as all Treasury instruments do.

Economic Capital : Economic capital is the amount of capital that a firm, usually in financial services, needs to ensure that the company stays solvent. Economic capital is calculated internally and is the amount of capital the firm should have to support any risks it takes on

Growth stock  :  The basic idea behind a growth stock is that you want to buy it when it’s not worth much and then sell it when it’s worth a lot (“buy low, sell high”)

Equity Financing – Issuing of stocks to the general public, this is called equity financing.

Stock quote or stock table is  a table with columns and rows showing financial and performance record of stocks usually within a period of time.

Dividends : Sum of money paid regularly  by a company to its shareholders out of its profits decided by the board of directors, to a class of its shareholders. Dividends can be issued as cash payments, as shares of stock, or other property.

Market Capitalization :

It is the current share price multiplied by all outstanding shares. This gives you a general idea of the size of a company. 

Price to Earnings Ratio :  It is the  price to earnings of a  company’s current share price divided by its EPS. This amount will show you about what investors are willing to pay per dollar of earnings. It can also be used as a metric to determine how much a company is over or undervalued.

Exchange Traded Funds

: Are funds that track indexes like the NASDAQ-100 Index, S&P 500, Dow Jones, etc. When you buy shares of an ETF, you are buying shares of a portfolio that tracks the yield and return of its native index.

ETF

ETN

EFC

EBC

Investment Fund

: An investment fund is a way of investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group. It  is a supply of capital belonging to numerous investors used to collectively purchase securities while each investor retains ownership and control of his own shares. An investment fund provides a broader selection of investment opportunities, greater management expertise and lower investment fees than investors might be able to obtain on their own.

Hedge Fund :  In general, a hedge fund is a private partnership that operates with little to no regulation from the U.S. Securities and Exchange Commission (SEC). A hedge fund uses a range of investment techniques and invests in a wide array of assets to generate a higher return for a given level of risk than what’s expected of normal investments. In many cases, hedge funds are managed to generate a consistent level of return, regardless of what the market does.

This article will be continuously updated – Greenaira Team

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Posted by: | July 29, 2016

Posted on: 2016 July 29
nigeria foreign exchnage market lagos

Nigeria foreign exchange market

Nigeria needs significant resources in order to meet its ambitious sustainable goals. While domestic financing sources such as tax revenues might be increasing they are not sufficient to fill in financial shortfall as as a result of the fall in oil prices. Which is the main source of government revenue.

The Nigerian economy is heavily dependent on the oil sector, which, accounts for over 95 percent of export earnings and about 40 percent of government revenues, according to the International Monetary Fund. According to the International Energy Agency, Nigeria produced about 2.53 million barrels per day, well below its oil production capacity of over 3 million barrels per day, in 2011.

Due to the shortfall in revenue, the Buhari  governments is seeking funds from the  international markets to complement domestic financing. External financing comes with huge risks, especially due to depreciation of local currencies with respect to the U.S. dollar.

Nigeria is currently experiencing loss of value in naira, meaning the Buhari Regime needs to raise more local currencies to pay back the country sovereign U.S. dollar-denominated debt.

The cost of debt repayment  is stifling the growth of the Nigeria Economy. The  Niger delta crisis, calls for Biafra and the slow wheel of change is not the best climate to attract huge foreign or encourage domestic investors. But there is hope, Nigeria GDP reached an all time high of 568.51 USD Billion in 2014. Presently it’s  about 481 billion – source, worldbank.

How can Nigeria mitigate this foreign exchange risk?

DEVALUATION -There has been some talk of devaluating the Nigerian currency in order to restore equilibrium.

With Nigeria being a net importer, it is likely that this would simply make the situation worse and the exchange rate increase would cause imports to become more costly. It must be noted that a devaluation coupled with an increase in the quantity of exports to the point at which Nigeria became a net exporter would only have positive benefits for the economy. The price of Nigerian exports would fall; increasing competition and contributing positively to GDP.

REFINING CRUDE OIL – If Nigeria were to switch the focus to constructing enough oil refineries to produce a sufficient quantity of domestically produced petrol to make Nigeria petrol-self-sustainable, there would be no need for Nigeria to export crude oil, only to later re-import the refined form of the same product, as is currently the case.

INCREASE EXPORT – Diversify the country income stream, increase other export such as cocoa, oil seeds, wood, cooper, aluminium, etc

STABILITY – Political stability brings about economic growth. Investors feel confident to invest, the environment is conducive to business, reduces employment. Increase overall country GDP, meaning more revenue for the government.

As it stands, the solution that the Nigerian government have proposed to the FOREX issue is to adopt a ‘flexible FOREX policy’ whereby the government will undertake to officially institute, incorporate and recognise the black market, rather than allowing two parallel exchange markets to run. This would allow the government to better regulate the use of the limited foreign USD reserves, and undoubtedly provide a more suitable short-term solution.

The government must realise that resisting market forces is like trying to force a river to flow upwards. But others argue, devaluation is not the answer. Some form of currency control is required.

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Posted by: | July 14, 2016

Posted on: 2016 July 14
promote-business-nigeria

Why you should Promote Your Business

Why you should Promote Your Business

#advertise #promotebusiness #adlisting #companybanner #company #lagos #Nigeria #placead #placebanner

What good is it, if you have an excellent product and nobody knows about it? You have to go out there and tell the world, more specifically your target market. The truth of the matter, the Success of your business depends on the number of people you can reach that require your products or services.

You have spent 1 year or two building your products perfecting your service, let the world know you exist (actually let your target market know you exist). If your business solves a particular problem let people know about it.

The big global giants still spend millions on advertising year in year out. To remind people of their products and services.

Remember it is also a mind game. You have to keep reminding people, humans are easily forgetful

 

Some pointers below, why you should promote your business

 

i. Successfull advertising guarantees you money money returns. For every $10 or N1000 naira you spend, you get $20 or N2,0000 Naira returns.

ii. Think about it, the established global giants – Microsoft, Apple, Nike, Reebok, Samsung. Despite how popular
there are Globally, still spend millions every year in advertising. There is a good reason why.

iii. Advertising allows you to target your ideal customers

iv. Advertising amplifies whatever you doing.  It can make a small company appear big or massive and  successful. Take advantage.

v. Advertising turns you into a brand and a household name. Think search think google.  Think Phone, think Apple Iphone, Think burger think Mcdonald for Europeans, you get the gist.

vi. Advertising makes you appear credible, your longtime credibility depends on your business dealings with its customers/public.

vii. Advertising helps you reach new customers

viii. Advertising helps you maintain healthy relationship with your current clients. Repeat business is what makes your business stay alive.

ix. Advertising helps your existing and potential new customers know or become aware of your new products and services

x. Advertising is a way of reminding and reassuring your customers

 

Let  Greenaira help you grow your business in Nigeria.

Email: info@greenaira.com

Skype: nigeriagreenaira
Speak to us on Live Chat on website

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Posted by: | February 25, 2016

Posted on: 2016 February 25
Page 2 of 212
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Abrasive Disc Sale Morocco METAL (125 X 3.2) For use on normal and me...

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superior quality Lightning Protecti...

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Brilltech is leading manufacturer and supplier of Lightning Protection Devi...

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Industrial Engineering Exhibition i...

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