Date from which interest (for a bond) or dividends (for a share) start to accrue.

At a given date, the portion of annual interest that has accrued on a debt security.

See actuarial rate of return.

Discount rate (internal rate of return) that sets the net present value (NPV) of a financial asset equal to zero.

Report published by listed companies summarizing their main financial statements (balance sheet, income statement, etc.) and other information. Some companies send it on request, others only to shareholders.

Company whose sole purpose is to manage investment portfolios (for legal entities, individuals or UCITS).

Order without a price limit executed at the opening price. It has priority over limit orders at the opening auction.

Measure of a stock’s sensitivity to market movements; it shows how much the stock tends to move relative to the market

Trade, agreed strictly on behalf of clients, between a buying broker and a selling broker, involving a specified quantity of securities and declared to the exchange under its block-trade rules.

Debt security representing a loan to the issuer, as opposed to a share which represents ownership.

Segment of the market on which debt securities are traded.

Capital increase through capitalization of reserves, with new shares granted free of charge to existing shareholders. The number of shares increases while total equity remains unchanged; the share price is mechanically adjusted.

New shares created by capitalizing reserves and allocated free of charge to existing shareholders.

Method of reducing share capital by lowering the nominal value per share and, where applicable, distributing the difference to shareholders.

Fees charged when buying or selling securities through a broker.

Tunis Stock Exchange 

Profit realized when the selling price of securities exceeds the purchase price.

Loss realized when the selling price of securities is lower than the purchase price.

Financial operation by which reserves are capitalized and converted into share capital (often via a bonus issue).

Financial operation by which reserves are capitalized and converted into share capital (often via a bonus issue).

Market on which securities are delivered and paid for immediately (no credit and no deferred settlement).

Market organization in which all orders are centralized in a single order book, as on the Tunis Stock Exchange, allowing supply and demand to be matched and an equilibrium price to be set.

Additional price paid per share above the current market price in order to acquire control of a company.

Bond that can be converted into shares of the issuing company according to predefined terms, instead of being repaid in cash.

Loan structure in which, at maturity (or during a period), bondholders may opt for repayment in cash or conversion into shares

Nominal interest rate of a bond or loan, used to calculate periodic interest payments as a percentage of the nominal value, without considering the exact timing of cash flows.

Risk for a bondholder of not knowing in advance at what rate coupons can be reinvested over the life of the bond. Zero-coupon bonds eliminate this risk.

Gradual purchase of shares on the market, through successive trades, in order to build up a significant stake without triggering immediate attention.

Assessment of an issuer’s creditworthiness, based on financial analysis and scoring techniques.

Risk arising from optimism or pessimism in the stock market linked to expectations about the economic cycle (booms and recessions).

Generic term for securities representing debt claims.

Mandatory declaration to the Tunis Stock Exchange for certain transactions between non-residents involving Tunisian securities and financial products.

Settlement system in which securities delivery and cash payment occur simultaneously at settlement date. On the Tunis market, settlement is generally T+2 and handled by Tunisie Clearing.

Operation whereby a group’s activities are separated into distinct companies and shares of new entities are distributed to existing shareholders, either automatically (spin-off), via exchange offers (split-off) or with the disappearance of the original entity (split-up).

Financial instruments (forwards, futures, swaps, options, etc.) whose value depends on an underlying asset, used to hedge or take positions on risks such as market, liquidity, counterparty or political risk. Traded OTC or on organized exchanges.

Contract by which an investor appoints a professional asset manager to manage a securities portfolio on their behalf.

Situation in which a financial security trades at a market price below its intrinsic or estimated value.

Payment made by a company to shareholders out of profits. It may be paid in cash or in shares; distribution depends on the company’s dividend policy and profitability.

Right attached to a share which determines the dividend amount to be received at year-end.

Percentage of profit for the year distributed to shareholders as dividends.

Policy chosen by a company regarding the proportion of profits to distribute versus the proportion retained to finance future investments or reduce debt.

Last dividend paid divided by the current share price.

For a bond, the weighted average maturity of all cash flows (principal and interest), and a measure of sensitivity of the bond price to interest-rate changes.

Umbrella term for risks that affect the cash flows of a financial asset and belong to the real economy (political risk, natural disasters, inflation, fraud, etc.).

Market in which prices fully and immediately reflect all available relevant information.

Portfolio that offers the best possible risk/return trade-off among available portfolios.

Value of a company’s operating assets, equal to market value of equity (market capitalization) plus net debt.

Difference between the expected return on the market portfolio and the risk-free rate. A stock’s expected risk premium can be estimated as market risk premium × the stock’s beta.

Date on which the share starts trading ex-dividend. The dividend is then paid to shareholders of record, and the share price is adjusted downward by approximately the amount of the dividend.

Nominal value used to calculate interest payments; in bonds with constant amortization, it is reduced over time as principal is redeemed.

Ratio of a company’s net debt to its shareholders’ equity.

Security with pre-defined and fixed cash flows (in nominal terms), such as a conventional bond.

Coupon indexed to a reference rate or price (e.g. money-market rate, inflation index); the security is then called a floating-rate or indexed-rate bond.

Massive sale of securities immediately after a placement or offering.

Portion of a company’s share capital held by the public and not locked into stable or strategic holdings; freely tradable on the market

Overallotment option in an IPO or placement allowing the lead manager to buy additional shares from the issuer (or selling shareholders) to stabilize the share price when demand is strong or weak.

Company whose shares typically have a low or zero dividend payout, because profits are reinvested to finance rapid growth.

Security combining characteristics of both equity and debt, such as preferred shares with preferential dividends and no voting rights, convertible bonds, or participating securities.

Lightly regulated investment funds, generally non-listed, pursuing speculative strategies and often using leverage and derivatives.

Company whose main assets consist of stakes in other companies; often used as a control vehicle for groups of investors.

Portfolio structured so as to be protected against interest-rate risk (e.g. through duration matching between assets and liabilities).

Financial statement summarizing all revenues and expenses over a period and leading to net profit or loss.

Company that has reached maturity and tends to distribute an increasing share of profits as dividends.

Indicator measuring the average performance of a group of securities. On the Tunis market, performance is tracked by TUNINDEX and the BVMT index, as well as sector indices

Risk of obtaining a real return lower than the inflation rate and being repaid in depreciated currency.

Risk that changes in interest rates cause capital losses on financial assets, even when issuers fully meet their obligations.

See specific risk 

On financial markets, investors typically adopt one of three behaviours:

• speculation (taking risk),
• hedging (reducing risk),
• arbitrage (exploiting mispricings).

(You can reference under “S”; included here only as a cross-reference if needed.)

Sudden, severe and generalized fall in the prices of listed securities.

Form of LBO in which the acquired company pursues further acquisitions in its sector, financed by debt, to build a larger group and generate synergies

Acquisition of a company financed largely by debt. A holding company is set up, borrows to buy the target and repays its debt using the target’s dividends or cash flows.

Order specifying a maximum buy price or a minimum sell price, allowing control over the execution price.

Risk of being unable to sell a financial asset at its fair price, either due to illiquidity or due to an illiquidity discount.

Repayment schedule where the sum of principal plus interest (the annuity) is constant in each period.

Repayment schedule where the principal repayment is constant in each period.

Key part of the annual report, alongside financial statements and notes, providing qualitative explanations on the company’s activity, risks, subsidiaries, etc.

Public offer launched by a shareholder (alone or in concert) holding more than a certain threshold (e.g. 95% of capital or voting rights), to give minority shareholders an exit. It may also be requested by a minority shareholder.

See Krach.

Ability to trade significant volumes at or near the quoted price without causing major price movements. It increases with the number of shares and the frequency of trades.

Activity consisting in continuously quoting bid and ask prices on a security for at least a minimum quantity, to provide liquidity.

Order without a price limit, executed as quickly as possible at the best available prices on the opposite side.

Risk related to market-wide factors (interest rates, inflation, taxation, macroeconomic conditions) that affect most securities.

Collective investment scheme consisting of a co-ownership of securities; units are issued and redeemed on demand by investors.

Risk of loss due to natural events such as storms, earthquakes, volcanic eruptions or tidal waves destroying assets

New shares created as part of a cash capital increase and subscribed by holders of subscription rights

Retail placement method in an IPO, where an indicative price range is set and orders are collected (often via a book-building process). The final price is determined jointly by the issuer and the lead manager, taking into account institutional placement prices

Contract giving the buyer the right, but not the obligation, to buy (call) or sell (put) an underlying asset at a predetermined strike price, either during a given period (American style) or on a specific date (European style), in exchange for a premium.

Book recording investors’ orders (volumes and prices) during a placement or on the exchange, allowing feasibility and pricing of a transaction to be assessed.

Segment of the Tunis market reserved for trading shares of companies making a public offering but not admitted to the official list.

Portion of subscribed capital that has actually been paid in by shareholders. Capital may be fully or partially paid up.

Negotiable security whose remuneration includes a fixed part and a variable part linked to the company’s performance and calculated on the nominal value.

Security interest over movable property (e.g. shares, bonds) granted as collateral for a debt and enforceable in case of default.

Portfolio composed of several securities whose aggregate risk is reduced thanks to imperfect correlation of returns.

Portfolio that offers the best risk/return trade-off given the investor’s constraints.

Portfolio structured to protect its value against interest-rate movements.

Right detached from an existing share during a cash capital increase, allowing the shareholder to subscribe to a specified number of new shares on a predefined ratio, usually during a limited subscription period.

Period at the start of the trading session during which orders are entered and accumulated without execution.

Dividend paid to holders of preferred shares with preferential dividends; typically set as a minimum percentage of nominal value or higher than any first ordinary dividend.

Share price divided by earnings per share (EPS); also known as the earnings multiple.

Procedure, for example after the sale of a controlling block, allowing minority shareholders to sell their shares at the same price as the controlling shareholder, or stabilizing the price after an IPO.

Market capitalization divided by the book value of equity.

Broker-dealer appointed to participate in government bond auctions and ensure liquidity and negotiability of such securities.

Market on which new securities are issued and subscribed by investors.

Placement of securities with a limited number of identified institutional investors, rather than via a public offering.

Process by which the State sells all or part of its stake in a company to the private sector.

Sale of part or all of a position after a price rise, in order to realize capital gains.

Legal document describing a securities offering (IPO, capital increase, bond issue), providing investors with all material information.

Company listed on an exchange and/or making a public offering of securities; listed regularly by the financial regulator.

Takeover offer in which shareholders of the target receive shares in the bidder or new entity instead of cash.

Offer in which existing shareholders sell all or part of their stake to the public at a set price; often used in IPOs.

Capital increase reserved for the public; existing shareholders must waive their pre-emptive rights in an extraordinary general meeting.

Operation in which an investor offers to purchase all or part of the share capital of a company, usually at a premium to the market price.

See credit rating.

Vehicle used to securitize bank receivables; it acquires receivables from credit institutions and finances them by issuing units subscribed by investors.

Subscription to new shares not taken up under irreducible subscription, generally allocated pro rata to rights exercised on an irreducible basis.

Difference between the redemption price and the nominal amount when they are not equal.

Sharp rise in a share price following a steep decline; if strong enough, it may signal a trend reversal.

Annual document filed with the CMF containing information similar to a prospectus, except for details of specific new issues or listings.

Contract under which an investor exchanges cash for securities for a fixed term, agreeing to reverse the transaction at maturity at a predetermined price.

Individual shareholder, as opposed to institutional investors.

Right allowing its holder to receive new bonus shares free of charge according to a predefined ratio, or to sell the right on the market.

In finance, risk is linked to the uncertainty of returns and is measured by the volatility (standard deviation) of returns or prices.

Asset with certain cash flows because its issuer is considered not to default (e.g. solvent government bonds).

Interest rate on a risk-free investment, typically the yield on government bonds (e.g. BTA).

Measured by the volatility of its price or returns; the higher the volatility, the higher the risk.

Marketing campaign during a securities offering during which company management meets investors in various financial centres to present the company and the transaction.

Transaction by which selected assets (often receivables) are sold to a special-purpose vehicle financed by issuing securities subscribed by investors; the vehicle passes through the cash flows.

Measure of the percentage change in a bond’s price induced by a given change in interest rates.

Moment when the seller receives the proceeds and the buyer receives the securities in their account.

Security representing a fraction of a company’s share capital, giving its holder shareholder status and rights (dividends, voting rights, information, etc.).

Offer by a company to repurchase its own shares, usually with a view to cancelling them.

Breakdown of share capital by categories of shareholders (family shareholders, institutions, UCITS, foreign investors, free float, etc.).

Type of UCITS widely used for collective investment in securities; may be mixed (bonds and shares) or mainly bond-based.

Company’s ability to meet its obligations in the event of liquidation. A company with negative shareholders’ equity is considered insolvent.

Risk specific to a particular security, independent of market-wide factors, e.g. management failures, accidents, or technological changes affecting a company.

Entering into financial transactions with the primary aim of making a profit by anticipating price movements.

Cash market for currencies, interest rates or commodities, with immediate delivery and payment.

All parties with an interest in the company: shareholders, employees, creditors, management, customers, etc.

IPO procedure used when a company already meets all listing requirements; its securities are directly admitted to the official list.

Firm licensed by the Financial Market Council to trade on the market for clients or on its own account.

Synonym of brokerage firm / stockbroker.

Tunis Stock Exchange.

Instruction given by a client to a broker to execute a trade, specifying side (buy/sell), security, quantity, validity and price conditions.

Action of purchasing shares during a capital increase or public offering.

Debt ranking after other creditors in case of liquidation; subordinated creditors are repaid only after privileged and senior unsecured creditors.

Temporary halt in trading of a security, for example pending a material announcement, following a takeover bid, or after the sale of a controlling block.

Monthly average of overnight money-market rates, published by the Central Bank of Tunisia at the end of each month.

Abbreviation for Average monthly money market rate.

Capitalization-weighted benchmark index of the Tunis Stock Exchange, launched with a base of 1,000 as of 31 December 1997, including all listed shares except investment companies and recently listed companies.

(End-of-period price + dividends received) divided by beginning-of-period price.

Security held not for strategic reasons but with the aim of generating a profit over the short or medium term.

Sequence of phases including order accumulation without trading, opening auction, continuous trading for the most liquid shares, possible accumulation for less liquid ones, and closing.

Execution resulting from matching buy and sell orders that are compatible in price and quantity.

Collective investment scheme managing a portfolio of securities on behalf of investors, including SICAVs and mutual funds (FCPs).

IPO mode in which one or more banks underwrite and place securities with institutional investors through book-building, and the result serves as a reference for retail offers

Situation where the IPO price is set below the estimated fair value of the share, in order to encourage investor participation.

Security (such as a share) whose cash flows (dividends) are uncertain and variable.

Measure ofv the magnitude of price or return fluctuations of a financial security.