BSE Back to Basics – 2015 – 2016 Understanding the Trading Report
• The Trading Report
– General Narrative – Index and Market Capitalization • Measuring the Market
– The Mutual Funds Section – The News Section – The Share Summary • Understanding the Markets
– The Week in Review
The Purpose of the Trading Report • The Trading Report as its name suggest simply explains what activity has occurred on the market on a particular day. • It is divided into sections – – – – – – –
The narrative and breakdown of activity in the market The Indices and Market Capitalization The Mutual Fund section News items Share Summary Week in Review (only on last trading day of the week) Advancers/Decliners (only on last trading day of the week)
The Trading Report - Narrative
The narrative gives detail of the top three traded securities plus a tabular layout of all trading activity by market.
The Trading Report â€“ Indices & Market Capitalization
â€˘ The narrative also reports on the performance of both market measures; the indices and market capitalization.
Measuring the Market • The Barbados Stock Exchange uses three major indices: – Local – Local companies listed on the Regular Market – Cross Listed – Companies which are listed in Barbados but are domiciled in another jurisdiction – Composite- All of the companies listed on the Exchange • Market Index: An index is essentially an imaginary portfolio of securities representing a particular market or a portion of it. Each index has its own calculation methodology and is usually expressed in terms of a change from a base value. For example, knowing that a stock exchange is at, say, 5000 doesn't tell you much. However, knowing that the index has risen 30% over the last year to 5000 gives a much better demonstration of performance. • Market Capitalization: The total dollar value of all outstanding shares. It's calculated by multiplying the number of shares by the current market price. This term is often referred to as market cap.
The Mutual Funds Section
â€˘ The BSE reports the weekly and monthly Net Asset Values (NAV) of a select group of Mutual Funds in Barbados.
The News Section
• The News section details various news items occurring in the marketplace – Annual General Meetings, Dividend Declarations, Put Through Notices, etc.
The Share Summary
The Share Summary details daily trading activity by market. Explanations of the various columns are given below.
The Share Summary Cont’d • • • • • • • • • • • •
Company – Name of the listed security Last Trade Date- last date the security traded Volume – Number of shares High- highest price the security traded at on the trade date Low- lowest price the security traded at on the trade date Last Close- Closing price on the previous trade date Current Close – Closing price that trade date Price Change – The difference between the current close and last close Bid Price – the highest price buyer is willing to pay for a security Ask Price – The lowest price a seller is willing to accept for a security Bid Size- Correlates to the bid price and gives the number of shares a buyer is willing to purchase at the quoted bid price. Ask Size- Correlates with the ask price and gives the number of shares a seller is selling at a quoted ask price
Understanding the Markets • Regular Market – the main market for securities, impacts the index – orders >= 1,000 shares • Junior Market – smaller or newer companies which do not meet the listing requirements of the Regular market • Fixed Income Market – Market for the trading of bonds and debentures • Put-through Market – Negotiated Market where the buyer and seller is known. 20% of the transaction left to market forces. • Block Trade Market – The only market for negotiated transactions which is uninterruptible.
The Week In Review • The Week In Review section is published as part of the Trading Report issued at the end of every week. • It gives a synopsis of the week’s total trading activity by market, week on week changes in both indices and market capitalization as well as a tabular representation of the week’s activity inclusive of share price movement data (Advancers/Decliners).
Conclusion • Understanding the BSE Trading Report is an essential step for anyone interested in becoming actively involved in investing. • Daily reports can be accessed here – – Trading Reports
• Interested persons can also gain insight on investing here – – Shares 101 – BSE Guide for Investors
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