Understanding the Trading Report

Contents • Introduction

– Vision, Mission and Core Values

• Definition of a Stock Exchange

• The Trading Report

– General Narrative

– Index and Market Capitalization

• Measuring the Market

– The Mutual Funds Section

– The News Section

– The Share Summary

• Understanding the Markets

– The Week in Review

• Conclusion

Our Vision

To be a great and lasting Caribbean Institution

by facilitating wealth creation through trading

on an efficient and cost-effective Exchange.

Our Mission

We intend, through education, to foster an

environment of confidence and trust in the

activities of the capital markets, so that all

Barbadians would participate in the trading of

financial instruments.

Core Values

• Integrity

• Fairness

• Quality service

• Confidence

• Trust

• Accuracy

Introduction

• Definition of a Stock Exchange:-

– A secondary centralized market for buying and selling stocks where the price is determined through supply - demand mechanisms. Individuals and institutions buy and sell stocks in an auction-like forum.

The Purpose of the Trading Report

• The Trading Report as its name suggest simply

explains what activity has occurred on the

market on a particular day.

• It is divided into sections

– The narrative and breakdown of activity in the market

– The Indices and Market Capitalization

– The Mutual Fund section

– News items

– Share Summary

– Week in Review (only on last trading day of the week)

– Advancers/Decliners (only on last trading day of the

week)

• The narrative gives detail of the top three

traded securities plus a tabular layout of all

trading activity by market.

The Trading Report - Narrative

• The narrative also reports on the

performance of both market measures; the

indices and market capitalization.

The Trading Report – Indices &

Market Capitalization

Measuring the Market

• The Barbados Stock Exchange uses three major indices:

– Local – Local companies listed on the Regular Market

– Cross Listed – Companies which are listed in Barbados but are

domiciled in another jurisdiction

– Composite- All of the companies listed on the Exchange

• Market Index: An index is essentially an imaginary portfolio of securities representing a particular market or a portion of it. Each index has its own calculation methodology and is usually expressed in terms of a change from a base value. For example, knowing that a stock exchange is at, say, 5000 doesn't tell you much. However, knowing that the index has risen 30% over the last year to 5000 gives a much better demonstration of performance.

• Market Capitalization: The total dollar value of all outstanding shares. It's calculated by multiplying the number of shares by the current market price. This term is often referred to as market cap.

• The BSE reports the weekly and monthly

Net Asset Values (NAV) of a select group

of Mutual Funds in Barbados.

The Mutual Funds Section

• The News section details various news

items occurring in the marketplace – Annual

General Meetings, Dividend Declarations,

Put Through Notices, etc.

The News Section

The Share Summary

The Share Summary details daily trading activity by market.

Explanations of the various columns are given below.

The Share Summary Cont’d • Company – Name of the listed security

• Last Trade Date- last date the security traded

• Volume – Number of shares

• High- highest price the security traded at on the trade date

• Low- lowest price the security traded at on the trade date

• Last Close- Closing price on the previous trade date

• Current Close – Closing price that trade date

• Price Change – The difference between the current close and last

close

• Bid Price – the highest price buyer is willing to pay for a security

• Ask Price – The lowest price a seller is willing to accept for a

security

• Bid Size- Correlates to the bid price and gives the number of shares a

buyer is willing to purchase at the quoted bid price.

• Ask Size- Correlates with the ask price and gives the number of

shares a seller is selling at a quoted ask price

The Share Summary Cont’d

• A Common question which baffles

potential shareholders is…

– Why do the company names repeat in

the odd-lot market?

– Why are the prices and values different

in the odd-lot market?

– What is the odd-lot market any way?

Understanding the Markets • Regular Market – the main market for securities, impacts

the index – orders >= 1,000 shares

• Odd Lot Market – market – orders < 1,000 shares

• Junior Market – smaller or newer companies which do not

meet the listing requirements of the Regular market

• Fixed Income Market – Market for the trading of bonds

and debentures

• Put-through Market – Negotiated Market where the buyer

and seller is known. 20% of the transaction left to market

forces.

• Block Trade Market – The only market for negotiated

transactions which is uninterruptible.

• The Week In Review section is

published as part of the Trading Report

issued at the end of every week.

• It gives a synopsis of the week’s total

trading activity by market, week on week

changes in both indices and market

capitalization as well as a tabular

representation of the week’s activity

inclusive of share price movement data

(Advancers/Decliners).

The Week In Review

• Understanding the BSE Trading Report is an essential

step for anyone interested in becoming actively involved

in investing.

• Daily reports can be accessed here -

http://bse.com.bb/Tradingreports.cfm

• Interested persons can also gain insight on investing

here -

http://bse.com.bb/downloads/Shares_101.pdf

http://bse.com.bb/downloads/Guide_For_Investors.pdf

Conclusion

Contact Information

Barry Blenman – Operations Supervisor –

Business Development

Bary.blenman@bse.com.bb

Telephone: (246) 436-9871/2

Fax: (246) 429-8942

Website: www.bse.com.bb