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Glossary

Aftermarket
Trading of an offering on or after the listing date.

Allocation
The number of shares given to a client from an offering.

Australian Securities and Investment Commission (ASIC)
A government agency that regulates and enforces securities laws & protects investors. ASIC maintains a database of Australia's 1.2 million companies.

Australian Stock Exchange (ASX)
Australia's permier market for trading shares in listed companies.

Buyer's Market
A market where buyers determine the price, usually because of an oversupply of stock.

CHESS Clearing House Electronic Sub-register System
A system that manages the settlement of ASX stock trades.

Closing Price
The last transaction price for a stock on a particular day.

Co-Manager
An underwriter that assists with the distribution of a offering.

Delisting
Removal of a company from trading on the ASX, usually because of merger or insolvency.

Director
A statutory officeholder of a company who is responsible for major decisions.

Demutualisation
A process whereby a mutual organisation turns itself into a shareholder owned company. Members of the mutual organisation become the new shareholders.

Disclosure
The reporting of financial statements, management shareholdings and other information that can be used for making investment decisions.

Dividend
The amount of money distrubuted to company shareholders out of net profits, usually biannually.

Due Dilegence
A process of verifying information about a company, including financial statements, management, market share, legal matters and risks.

Escrow
An agreement whereby certain individuals and corporations must retain stock and not sell for a given time. Directors of newly listed company may have shares put in escrow.

Float
A term used in Australia for raising capital and listing on the ASX.

Going Public
The process of taking a private company (where the shares are in private hands) and converting the ownership to public hands (where shares are traded on the ASX).

Green Shoe
An amount of shares that is reserved for issuing at the original price at the underwriter's option. This is used by the underwriter mainain an orderly market after listing.

Holding Company
A company that owns enough shares of another company to secure voting control.

IPO - Initial Public Offering
The first time a company offers it shares to the public.

Issue Price
The price at which a new security will be sold to the public.

Lead Manager
The lead underwriter who, among other things, is in charge of organising and distributing stock to the underwriters, and making stabilizing transactions once the new issue begins to trade.

Lead Underwriter
The underwriter who, among other things, helps set the offering price and organises the other underwriters in selling a new issue.

Listing Rules
A set of rules hat all companies must follow for trading on the ASX. They include disclosing decisions that may affect the share price.

Market Capitalization
The value that the market puts on a company, calculated by multiplying the shares outstanding by the share price.

New Issue
Shares offered for sale to the public for the first time.

Offering Date
The first day a security is publicly offered for sale.

Offering Price
The price for which a new security issue will be sold to the public.

Official List
The register of public companies that trade on the ASX.

Opening Premium
The difference between the opening price and offering price, given that the difference is positive.

Outstanding Shares
The number of shares that have been issued by the company.

Oversubscribed
When the demand for shares in a new listing exceeds supply, the issue is said to be oversubscrived. There may be an opening premium in this case.

Privatisation
The change of ownership of a company from government control to private control.

Pipeline
The new issues that are due to go public withing a given timeframe.

Postponement
An offering that is pushed back to a later date. This may lead to the offering being cancelled.

Privately Held
A company that has never been offered for sale publicly.

Private Placement
An investment in a company by a group of private investors.

Prospectus
A company document registered with ASIC to provide prospective buyers information about the company's financial performance, management, risks and prospects.

Risk Factors
Considerations that are disclosed in the prospectus that might materially affect the company's financials, stock price, or reputation in a negative way.

Road Show
Formal presentations made by underwriters usually to institutional investors to inform them of an issue.

Secondary Offering
When a public company issues additional shares to the public.

Seller's Market
A market where there is more demand than supply for a security.

Selling Shareholders
Investors in a company who sell part or all of their stake as part of that company's IPO.

Settlement Date
The date that securities must be paid for.

Shareholder
Any person who owns shares of a company's stock.

Sponsoring Broker
For a fee the sponsoring broker manages the whole listing process, from putting the prospectus together through to marketing the float to the investment community. Unlike an underwriter, a sponsoring broker does not take on any of the risk that the issued shares are not fully taken up by offering to buy the shortfall.

Stock Exchange
The physical location where brokers transact business for their clients. The ASX is the principal stock exchange in Australia.

Supplementary Prospectus
An additional document that is filed with ASX that has additional information regarding the proposed offering for the company.

Tranche
An allocation of shares, made to a partiaular region or at a particular time.

Underwriter
A stockbroker or investment bank that sells shares in a new issue to the public. The underwriter will profit from the fees generated by the offering.

Use of Proceeds
How the company plans to use the monies it generated from an IPO or Secondary.

Valuation
The measure of what a company expecting to come public is worth.

Volatility
Movement in the price of a stock from its high and low.

Withdrawal
When a company decides to not continue with its proposed offering of securities. The reasons for this can be numerous and don't always signify trouble with the proposed offering. This term is sometimes used with the word cancellation.

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