Balance Sheet: A statement of the financial position of a company at a point in time. A balance sheet lists the Assets, Liabilities and Shareholders Equity of the company with me first on one half of the statement and the latter two on the other such that Assets = Liabilities + Shareholders Equity.
Bargain: A stock market transaction.
Bargain Hunting: The purchase of a share after it has been falling for sometime on the belief that it now represents good value.
Base Lending Rate: See Prime Rate.
Bear: A person who expects the market to decline. A stock market bear is known as such because a bear claws its victim downward (opposite to a Bull). The term ‘Bearish’ is used to describe pessimistic market sentiment. A Bear market means falling market.
Bear Squeeze: A shortage of a particular share(s) caused by too many bears having sold short and are not able to cover their short position. As a result, the price of the shares is forced up by a large extent.
Bear (or Short) Covering: When a bear who has sold shares he does not possess attempts to buy them at a lower price to meet his obligation to deliver.
Beneficial Interest: The rightful entitlement of a person to receive the return or benefit of property/ securities.
Beta Coefficient: More commonly known as Beta. This is the measure of the relative volatility of a stock’s price compared with the market as a whole. A stock with a beta of 1.00 has the same volatility as the market while a stock with beta of 2.00 is twice as volatile as the market.
Blue Chip: A top-grade share.
Bonds: The common name for Fixed Interest Securities of more than one year in term.
Bonus Issue: The issue of additional new shares without cost to the existing shareholders of a company in direct proportion to their existing ownership of the company’s shares. Bonus issues are usually made in proportion of one new share for one or more existing shares held, eg. One for Four Bonus Issue.
Book Value: This is the value of the assets of a company as recorded in its books of accounts. Book value need not be the same as the purchase price or market value. In the US, this term is also used to mean Nett Asset Value of a firm.
Break: A sharp, rapid change in the price of a stock or the market as a whole.
Bull: A person who expects the market to rise. A stock market bull is known as such because a bull tosses its victim upwards.
Business Cycle: Periodic fluctuations in the economic activities of a country which give rise to variations in income and employment.