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Раздел 3. Введение в профессиональную коммуникацию
Тема 16. The Stock Market
Целью изучения данной темы является овладение студентами
фактической,
терминологической,
лексико-грамматической
информацией, которая позволяет правильно интерпретировать и
самостоятельно представить данные на английском языке относительно
ситуации на фондовом рынке.
В результате изучения темы студенты должны:
• знать, что такое фондовый рынок; основные типы ценных бумаг; что
такое фондовая биржа; особенности закрытых и открытых акционерных
обществ в части торговли своими акциями; лексико-грамматические
конструкции, используемые при описании ситуации и прогнозировании
изменений на фондовом рынке, а также при описании состояния ценных
бумаг;
• уметь правильно интерпретировать таблицы котировок акций,
представленные в англоязычной прессе; на основе данных о котировках
акций и общей информации о компаниях и рынках делать прогноз
относительно развития фирмы;
• быть ознакомлены с современными тенденциями на мировом
фондовом рынке, с названиями крупнейших фондовых бирж.
Оглавление
Questions to be considered ......................................................................... 1
What is stock market ................................................................................... 1
Types of securities that are traded on the stock market ............................... 2
What is stock exchange. World famous stock exchanges. Electronic stock
market ......................................................................................................... 2
Private and public limited companies. Listed companies ............................. 3
How share value is determined, described and changed ............................. 3
Test yourself ................................................................................................ 6
Библиография ............................................................................................ 6
Questions to be considered
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what is stock market;
types of securities that are traded on the stock market;
what is stock exchange, world famous stock exchanges;
electronic stock market;
private and public limited companies, listed companies;
how share value is determined, described and changed.
What is stock market
The stock market is the business of buying and selling stocks, shares
and other types of securities. The stock market exists to provide a company
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with the necessary money. It can be done by issuing different types of
securities.
Types of securities that are traded on the stock market
1. A company can issue shares (US – stocks) – equal parts into which
the ownership of a company is divided. There are different types of
shares: common, or ordinary shares, preferred shares. Different types
of shares are called equities. A person owning shares is called an
investor or a shareholder (US stockholder); he/she makes money by
receiving dividends - a part of a company's profit that is divided among
the people with shares in the company. A shareholder can be a person
from the general public or an institutional investor. Shares can be
acquired directly on the stock market, or using services of a specialist
company and brokers.
2. A company can issue bonds - an official document promising that a
company will pay back fixed interest rates after a fixed period of time.
Thus a company borrows money, or takes a loan, from investors or
bondholders. Bonds are usually connected with less risk but also less
profitability in comparison to shares.
The word “securities” refers to both shares and bonds.
What is stock exchange. World famous stock exchanges. Electronic
stock market
Securities of companies are mainly sold on the stock exchange – a
place where stocks and shares are bought and sold. There are a number of
world famous stock exchanges, for example:
• New York Stock Exchange (NYSE) – the biggest stock exchange in the
world founded in 1792, a place on NYSE can cost up to $3m;
• American Stock Exchange (AMEX);
• London Stock Exchange (LSE);
• Tokyo Stock Exchange (TSE);
• New York Mercantile Exchange (NYMEX);
• Europe's Global Financial Marketplace (Eurex).
Electronic stock market is developing fast globally in the past few years.
As a result there appear a lot of electronic stock exchanges:
• North American Securities Dealers Automated Quotations (NASDAQ);
• Archipelago Holdings (already merged with NYSE);
• Foreign Exchange (FOREX) – currency exchange.
Besides, the biggest stock exchanges reflect their trade in the Internet
as well.
A trend towards electronic investments is coming from the United
States to Europe and has already conquered Russia where several
companies provide an access to world electronic exchanges. In the United
States about 20% of all stock trades are entered from the Internet. A quick
development of E-commerce is happening due to the globalization process.
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The further development of a single currency will add up to the creation of a
global marketplace.
The possibility to log on to electronic share trade immediately has the
following advantages:
• an investor can follow the situation on the stock market on-the-fly and
react promptly;
• a person has an opportunity to work with his investments at any time of the
day that is convenient to him/her;
• as Web surfing in general is gathering pace, a person can invest together
with carrying out other tasks in the Internet.
Investors prefer to be in the know of investment environment themselves and
take independent decisions so they either read special books and manuals or
use brokers as consultants. Brokers of course are very unhappy about this
because their fees are steadily moving down.
Private and public limited companies. Listed companies
Companies with share capital in Britain can be private limited (in Russia
– a close company) or public limited (in Russia – a public company). A
private limited company (Ltd) – a company whose shares are not bought
and sold on the stock market and can only pass to another person with the
agreement of other
shareholders. A public limited company (plc) - a
company owned by at least two people and whose shares can be bought by
everyone without the agreement of other shareholders, for example, the
shares can be freely traded on the stock exchange. If a company has the
right to be represented on a stock exchange, it is named a listed company.
The first-rate stock exchanges value their reputation very much; so to
become listed there, a company should meet certain requirements: its history
and perspectives are thoroughly studied beforehand. Since a company has
been listed on a famous stock exchange, it usually brings a degree of
certainty and stability in public opinion though doesn’t necessarily mean that
there is no risk and failure at all. Companies or shares that make a profit and
are considered safe are called blue-chip companies/shares.
How share value is determined, described and changed
When we need to describe the value of shares we use the word
“quotation” – that is a written statement of exactly how much money
something will cost. The share price is influenced by a great variety of
reasons: political events, the state of economy, recessions, inflation, interest
rates. Many business newspapers have a financial section, which includes
information about the share prices of listed companies. This information
enables investors to follow the progress of their shares and make a decision
to sell out or to buy more shares. A typical report on the share prices includes
the following sections:
1. “Sector” – companies in the list are grouped according to the sector of
their business, for example, insurance, building, banks etc.
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2. “High/low” – these columns show the highest and the lowest prices for
the shares during the current year.
3. “Stock” – the name of the share.
4. “Price” – this shows the price of the share as it stood at the close of
business yesterday.
5. “Change” – this shows how much the closing price of the share
changed in comparison with the previous day’s closing price.
6. “Yield” – the yield shows how much shareholders can expect to receive
as a dividend for every one pound invested (based on the current share
price).
7. “Price-Earnings ratio” – this figure refers to the relationship between the
current market price of a share and the profit earned by the company
over the most recent year.
The third conditional
When we study the history of a company or stock market development
on the whole we usually talk about used or lost opportunities. To describe
them we apply the third conditional. The third conditional is used to talk
about actions or events that did not happen in the past, and the imaginary
consequences:
If you had bought shares in Norcros, (but you didn’t) you would have
made a lot of money. (but you didn’t)
We use the past perfect tense in the if-clause, and ‘would have + past
participle’ in the main clause:
If I hadn’t sold my shares after six months, I wouldn’t have lost so
much.
We can ‘mix’ clauses from second and third conditional sentences to
talk about present consequences of past actions or possible past
consequences of imaginary present situations:
If I had bought more shares, (but I didn’t, in the past) I would be rich.
(but I’m not, now)
If I owned more shares of this company, (but I don’t, now) I would have
got better dividends last year. (but I didn’t, in the past).
Describing changes
When we talk about share value and a company performance on the
stock market we use verbs, nouns, adjectives and adverbs that describe
different movements. Verbs and nouns can be divided into three groups:
Upward movement verb
(noun)
to boom (a boom)
to climb (climb)
to develop (development)
to double, to triple, to
quadruple
to gain (a gain)
Stable situation
verb (noun)
to fluctuate (fluctuation)
to maintain (maintenance)
to stabilize (stabilization,
stability
to stand at
Downward movement verb
(noun)
to cut (down) (cut)
to collapse (a collapse)
to decline (decline)
to decrease (decrease)
to dive (dive)
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to go up
to grow (growth)
to improve (improvement)
to increase (increase)
to jump (jump)
to lift (lift)
to reach peak, record high
to rise (rise)
to rocket
to soar
to surge (surge)
to drop (drop)
to dwindle
to fall (fall)
to go down
to shorten
to lose (loss)
to plunge (plunge)
to sink
to slide (slide)
to tumble (tumble)
Trends are sometimes described by verbs with preposition after them,
they are called phrasal verbs, for example “ to cut down”, “to go up”, “to go
down”. The same verb with different prepositions usually has different
meanings. Phrasal verbs are transitive, i.e. followed by an object.
To make the description more bright and exact we can use adjectives
with nouns and adverbs with verbs, such as:
Adjective
Adverb
considerable
disastrous
dramatic
slight
steady
sharp
considerably
disastrously
dramatically
slightly
steadily
sharply
Here are some examples of using ‘movement’ verbs/nouns plus
adjectives/ adverbs in press:
Simmons and Simmons face a disastrous year as sales continue to
slide.
Jones and Shipman profits reach record high.
Motorola stock falls $3 to close at $52.
Apple shares plunge sharply despite positive earnings.
Using “yet”, “still” and “already”
There are three more adverbs that are frequently used in describing
trend and market decisions, which are very often confused with each other:
yet, still, already. We use ‘still’ to emphasise that a situation continues at the
time of speaking. We use ‘already’ to emphasise that a situation started, or
something was done, before the time of speaking. We use ‘yet’ (at the end of
the sentence) to emphasise that something hasn’t happened after some time.
We use ‘yet’ when asking question about whether something has happened
or not:
I’m still addicted to investment fever.
European investors can already use US on-line brokers.
I haven’t made any profit on my shares yet.
Have you bought shares in your company yet?
Each year billions of shares and bonds are traded on the world stock
market. It has become not just an ordinary source of income; it is a place to
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win or to lose huge assets, it provides millions of workplaces, supports
national economies and at the same time fosters the current trend towards
globalization.
Test yourself
1. What is the stock market?
2. Why do we need the stock market?
3. What two types of securities can you name?
4. What types of shares can you name?
5. How do we call a person who owns shares/stocks/bonds?
6. How does a shareholder make money?
7. What are dividends?
8. Who can become a shareholder?
9. How can securities be acquired?
10. What is a stock exchange?
11. Name world famous stock exchanges.
12. Why is electronic commerce becoming more and more popular?
13. What is a private limited company?
14. What is a public limited company?
15. What is a listed company?
16. When do we use the third conditional?
17. How do we form the third conditional?
18. What is “quotation”?
19. What sections does a typical report on the share prices include?
20. What is “sector” in the share prices report?
21. What does “high/low” column in the share prices report show?
22. What does “share” column in the share price report show?
23. What does “price” column in the share prices report show?
24. What does “change” column in the share prices report show?
25. What is “yield” in the share prices report?
26. What is “price-earnings ratio” in the share prices report?
27. Name not less than five verbs (together with corresponding nouns) that
describe upward movement.
28. Name not less than five verbs (together with corresponding nouns) that
describe downward movement.
29. Name three verbs (together with corresponding nouns) that describe
stable situation.
30. Name not less than five adjectives (together with corresponding
adverbs) that are used to describe the market situation more precisely.
Библиография
1. Graham Tullis, Tonya Trappe. New Insights into Business. Pearson
Education Limited, 2005.
2. Longman Dictionary of Contemporary English. Pearson Education Limited,
2004.
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