Stock Market Terms By Letter: R

R

Random Walk Hypothesis (RWH): The precursor theory of Efficient Market Hypothesis. Believers of this theory hold that stock (and other commodities) prices move randomly about and that it would not be possible for an individual to predict accurately future price trends. See Efficient Market Hypothesis.

Rally: Strong price rises which generally occur across the board, usually after a decline.

Range: Difference between the highest and lowest prices recorded during a given trading session, week, month or any other given period

Ratio Analysis: A form of Financial Analysis of a firm by carrying out computation of various financial ratios such as liquidity, gearing and profitability ratios

Reaction: Price decline following an advance or vice versa.

Realizable Value: Refers to the amount of cash which an be raised by liquidating an asset.
Recession: A short period of falling consumption, production and prices with rising unemployment .

Redeem: To repay the principal sum of a loan.

Redemption: Noun form of ‘Redeem’. See above.

Register: The record of holders of registered stocks or shares.

Registrar: The keeper of a register.

Remisier: The colloquial term for Licensed Dealer of the stock exchange. A Remisier is permitted by the stock exchange to deal in shares.

Reserves: When used in relation to accounting statements, Reserves has a different meaning from its usual usage. Used in this form, it is best to be thought of as an accounting number placed in the Balance Sheet under Shareholders Equity in order to keep both sides in balance after a unilateral increase in the value of the assets of the company arising from undistributed Earnings, revaluation, surplus of paid in capital over par value etc. Reserves are usually classified into several categories, Capital, Revenue, Share Premium Account etc.

Restructure: In Malaysia, it is usually taken to mean the re organisation of a company’s shareholding to conform with the New Economic Policy. It can also mean the re organisation of a company’s equity structure after it has suffered large losses such that its remaining equity capital is not sufficient to sustain the company’s business.

Retail Price Index: An indicator designed to measure the general level of prices of goods and services in an economy. It is used as a measure of the rate of inflation.

Retained Earnings: That part of the nett earnings of the firm which is not paid out in the form of dividend to shareholders. This term is normally used in the American form of accounting and is the same as Total Reserves under the Commonwealth accounting system.

Return: The total gain (income plus capital gain) over and above the cost of investment in an asset over a period of time. It is usually stated in percentage terms.

Revaluation: Changing the Book Value of a company’s assets to reflect current market value.

Rigging: Manipulation of stock prices in the desired direction by a judicious combination of market activities and the spreading of rum ours.

Rights: Entitlement to take up additional shares, issued pro rata to existing shareholders, at a specific price on a specific date.

Risk: The element of uncertainty relating to the degree by which the actual return lion: an investment will vary from the expected return. Usually, the higher the risk of“ an investment, the higher ought to be the expected return.

Round Lot: A quantity of shares which is the basic unit of transaction in a particular stock market. In Malaysia/Singapore, this is 1,000 shares; in the US it is 100 shares.

Round turn: Completion of both s purchase and off-setting sale of stocks or a sale and an off-setting purchase.

Run: Market term used to describe a spirited price appreciation of security. it is also used to describe a rush to withdraw funds from financial institutions.