Stock Market Terms By Letter: H

Hidden Reserves: Those reserves which are not disclosed in the balance sheet, e.g.

undervalued assets, overestimated expense provisions or depreciation. It is a common practice among st older Commonwealth banks to include Hidden Reserves in their accounts.‘High Flyer’ Stock: A stock which has made a substantial gain in price recently. It is usually a speculative share.

High: The highest price transacted for a share during a period (as opposed to Low). The two are often tabulated in price quotation reports or newspapers as Year High Low.

Historical Cost Accounting: An accounting convention based upon the historical cost, that is, the actual cost at which the assets of the companies are purchased. Therefore, it tends to overstate profitability and understates the assets in real terms. This is the convention normally practiced in this region, slightly modified to allow revaluation of fixed assets. (See also Current Cost Accounting.)

Holding Company: A company which owns more than 20 per cent of the shares of one or more companies. The latter are known either as Subsidiaries (more than 50% owned) or Associates (20-50% owned).

Hurdle Rate: The minimum acceptable rate of return on an investment.