Stock SplitA corporate action in which a company's existing shares are divided into multiple shares. Although the number of shares outstanding increases by a specific multiple, the total dollar value of the shares remains the same compared to pre-split amounts, because no real value has been added as a result of the split.
In the U.K., a stock split is referred to as a "scrip issue", "bonus issue", "capitalization issue" or "free issue".
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For example, in a 2-for-1 split, each stockholder receives an additional share for each share he or she holds.
One reason as to why stock splits are performed is that a company's share price has grown so high that to many investors, the shares are too expensive to buy in round lots.
For example, if a XYZ Corp.'s shares were worth $1,000 each, investors would need to purchase $100,000 in order to own 100 shares. If each share was worth $10, investors would only need to pay $1,000 to own 100 shares.
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Keith Explanation:
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Price | Quantity | Total
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Before
15.00 1000 15000
After SHARE SPLIT OF RM1 INTO 2 50SEN
7.50 2000 15000
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Bonus Issue
An offer of free additional shares to existing shareholders. A company may decide to distribute further shares as an alternative to increasing the dividend payout.
Also known as a "scrip issue" or "capitalization issue".
New shares are issued to shareholders in proportion to their holdings. For example, the company may give one bonus share for every five shares held.
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Keith Explanation:
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Price | Quantity | Total
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Before
15.00 1000 15000
After BONUS OF 1 FOR 5
15.00 1200 18000 ** However, normally after bonus issue distribution, the share price will drop to maybe around 12.50.
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Share BuybackThe buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may be looking for a controlling stake.
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A buyback is a method for company to invest in itself since they can't own themselves. Thus, buybacks reduce the number of shares outstanding on the market which increases the proportion of shares the company owns. Buybacks can be carried out in two ways:
1. Shareholders may be presented with a tender offer whereby they have the option to submit (or tender) a portion or all of their shares within a certain time frame and at a premium to the current market price. This premium compensates investors for tendering their shares rather than holding on to them.
2. Companies buy back shares on the open market over an extended period of time.
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Keith Explanation:
Normally share buyback is good. Because it reduce the number of shares and increase the earning per share.
Think this way:
Suppose a company
Earning : RM 10000
Number of shares: 5000
EPS: RM2.00
However,
Number of shares reduced to :4000
EPS: RM2.50
But too bad, in Malaysia Stock Exchange histories, there's no public holding company cancelled off their share. Normally either to stabillise the stock price or held as treasury shares or another form of cash to acquire another company.
A share buyback is deemed to be bad for investor would be, the company buy when the price is low but sell back when price is high. This is highly unethical.
Credit: Investopedia
Added on April 16, 2008, 4:16 pmConsumer Confidence Index (CCI)QUOTE
Background
The Consumer Confidence Index (CCI) is a monthly release from the Conference Board, a non-profit business group that is highly regarded by investors and the Federal Reserve. CCI is a unique indicator, formed from survey results of more than 5,000 households and designed to gauge the relative financial health, spending power and confidence of the average consumer.
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What it Means for Investors
A strong consumer confidence report, especially at a time when the economy is lagging behind estimates, can move the market by making investors more willing to purchase equities. The idea behind consumer confidence is that a happy consumer - one who feels that his or her standard of living is increasing - is more likely to spend more and make bigger purchases, like a new car or home.
Gross Domestic Product (GDP)QUOTE
Background
The gross domestic product (GDP) is the godfather of the indicator world. As an aggregate measure of total economic production for a country, GDP represents the market value of all goods and services produced by the economy during the period measured, including personal consumption, government purchases, private inventories, paid-in construction costs and the foreign trade balance (exports are added, imports are subtracted).
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What it Means for Investors
Real GDP is the one indicator that says the most about the health of the economy and the advance release will almost always move markets. It is by far the most followed, discussed and digested indicator out there - useful for economists, analysts, investors and policy makers. The general consensus is that 2.5-3.5% per year growth in real GDP is the range of best overall benefit; enough to provide for corporate profit and jobs growth yet moderate enough to not incite undue inflationary concerns. If the economy is just coming out of recession, it is OK for the GDP figure to jump into the 6-8% range briefly, but investors will look for the long-term rate to stay near the 3% level. The general definition of an economic recession is two consecutive quarters of negative GDP growth, which last occurred in the United States in 2001.
Credit : Investopedia
This post has been edited by keith_hjinhoh: Apr 16 2008, 04:17 PM 
Apr 16 2008, 03:52 PM, updated 18y ago
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