Glossary

Like traditional warrants, naked warrants are traded on the stock exchange. They are issued primarily by banks and securities houses. The writer of a warrant need not be the issuer of the underlying instrument.

NASDAQ is a New York-based electronic trading and price information system for exchange traders. The system is primarily used for trading in growth stocks; however, speculative stocks can also be traded. The NASDAQ composite index tracks the price development of the stocks listed on NASDAQ.

NEMAX® 50 was launched on 1 July 1999. Until 21 March 2003, it represented the 50 largest German and foreign companies listed in the Neuer Markt segment, measured in terms of market capitalization and volume of trading.

From 24 March 2003 until 31 December 2004, NEMAX 50 comprised the 50 largest shares from technology sectors in the Prime Standard segment of FWB® Frankfurter Wertpapierbörse (the Frankfurt Stock Exchange), ranking below the DAX® shares in terms of market capitalization and volume of trading. The base date for the calculation of the index was 30th December 1997 = 1,000 points. The calculation of NEMAX 50 was discontinued by the end of 2004.

The NAV is calculated by dividing the fund's assets by the number of shares outstanding, and is usually equivalent to the market price of one share. Deutsche Börse (the Frankfurt Stock Exchange) computes the NAVs of the index funds listed in XTF® at regular intervals on behalf of the respective investment company, and publishes them like the prices of individual stocks.

Companies must pay corporate tax on distributed profits. This tax is subtracted from the gross dividend before it is paid out to shareholders. The resulting amount - i.e., the gross dividend minus corporate tax - is called a cash dividend. For example: Gross dividend: EUR 3 Corporate tax (25%): EUR 0.75 Cash dividend: EUR 2.25 Synonyms: Cash divided

New issue describes the initial admission of a security to exchange trading. In this context, securities are company shares, bonds or certificates. The issue of shares serves companies as a means to acquire equity capital, which is then used by the company. In contrast to this measure, companies may alternatively acquire outside capital through bank credits or the issuance of corporate bonds, which they must pay back at the end of maturity.  

New issue may also describe the shares of a company being placed on the stock market for the first time within the scope of a capital increase or replacement. Before a company is admitted to exchange trading, it must fulfill a number of admission criteria, which vary according to the respective market segment.

Before the issue, investors can subscribe to the shares of a company during the subscription phase by placing a buy order. If – during this period – demand turns out to be higher than the available supply, the security is oversubscribed.

Synonyms: Primary market

New shares are usually issued after the start of the financial year. As a result, they are not fully entitled to dividend payments, and are listed and traded on the exchange separately from the "old" shares until dividends have been paid. Before being admitted to trading on the exchange, new shares are traded in the regulated unofficial market and off-floor trading.

Existing shareholders usually have subscription rights to new shares. By purchasing new shares, they can ensure that they own the same percentage of the company's capital stock as they did prior to the capital increase.

Former trading segment for central and eastern European securities in free float on FWB Frankfurter Wertpapierbörse (Frankfurt Stock Exchange)

In contrast to nominal par shares, which indicate a fixed amount of base capital, no-par shares securitize a percentage amount of the company’s base capital. No-par share certificates do not indicate the rate of participation, but instead only indicate, for example, “One Share in the Company.” That means an adjustment in the certificate can be avoided in the case of any capital increase. A no-par share’s rate of participation in the company can be calculated based on the base capital as indicated in the company’s articles of incorporation.

In Germany, the nominal or stated value of a company's capital stock must be at least €50,000. It is divided into par shares or no-par shares. If the company undertakes an ordinary or simple capital write-down, the value of the capital stock can temporarily drop below this minimum level. However, a capital write-down with this consequence will be approved only if the company plans to meet the minimum requirement through a subsequent capital increase.

The capital stock of a company may only be increased or reduced upon approval by the annual general meeting.

Reverse convertibles have a nominal value, on which investors are paid an interest for each day they are holding the security. The interest paid does not depend on the current price of the reverse convertible. At the end of maturity, the issuer may choose to either deliver the number of underlying shares corresponding to the exercise ratio or pay out the nominal value of the reverse convertible. As a rule, this decision depends on the current price of the underlying.

In case of strong price losses of the underlying, the investor may not be paid the full nominal value at the end of maturity. 

If the reverse convertible has a knock-in level, the issuer's choice is restricted. He may only deliver shares if the price of the underlying fell below the knock-in level at least once during the derivative's maturity.

Synonyms: face value, par value

More information on reverse convertibles