BASIC FACTS

1.             What is a stock exchange?

A stock exchange is a market where the securities of companies and other institutions are bought and sold, i.e. traded.

2.             What are securities?

Securities are instruments for raising finance by the shareholders of a company. They come in two types – equity securities and debt securities. Equity securities, which are also known as shares, give one part-ownership of a company and with it the right to a share of a company’s dividends. Debt securities represent a debt by an organisation. They can be issued variously by companies and governments both local and central. They do not give their owners ownership of the organisation. They are usually issued for a fixed term and the amount of capital represented by them has to be paid back to their owners at the end of the debt security’s term. Debt securities usually also carry an interest charge which is paid to their holders at specified periods during the debt security’s term.

3.             What is a trade?

A trade is the action of transacting in securities on the LuSE. A trade is effected when buyers and sellers match at a given price.

4.             What is a primary market?

Primary market offerings of securities occur when securities are offered for sale to the public for the first time.

5.             What is meant by secondary market trading? 

Secondary market trading of securities occurs when shares that have been bought through a primary market offering are traded on the LuSE.