A quick reference for the terms you will see on the Trade screen, in our articles, and in the financial news. Bookmark this one.
Prices and identifiers
Ticker. The short code for a listed company. GCB is the ticker for GCB Bank. MTNGH is MTN Ghana. Think of it as the company’s handle on the exchange.
Bid. The highest price any buyer is currently willing to pay for the stock.
Ask (or offer). The lowest price any seller is currently willing to accept.
Spread. The gap between bid and ask. A narrow spread means there is plenty of trading activity. A wide spread means few people are trading the stock right now.
Lot size. The minimum number of shares you can buy or sell in one order on the exchange. Varies by stock.
Valuing the company
Market cap. Share price multiplied by the total number of shares outstanding. It tells you what the market thinks the whole company is worth today.
EPS (Earnings Per Share). The company’s profit divided by the number of shares. Higher is usually better, but the trajectory (is it growing?) matters more than the absolute number.
P/E (Price-to-Earnings ratio). Share price divided by EPS. A rough measure of how much investors are willing to pay for each cedi of current profit. A high P/E means the market expects strong growth ahead.
Dividends and cash returns
Dividend. A cash payment made by the company to its shareholders, usually from profit.
Dividend yield. Annual dividend divided by current share price, as a percentage. A GHS 0.20 dividend on a GHS 4.00 share is a 5% yield.
Ex-dividend date. The cut-off. Buy the share before this date to qualify for the next dividend. Buy on or after, and you miss it.
Record date. The date the company checks its register to see who qualifies to receive the dividend.
Going public
IPO (Initial Public Offering). The first time a company sells shares to the public and lists on the exchange.
Secondary market. The regular, day-to-day trading of shares between investors, via the exchange, after the IPO.
