SIMILARITIES BETWEEN JOBBERS AND BROKERS
- Both operate in the securities market
- Both do not hold shares for investment purposes.
- Activities of both are regulated by the rules of the securities market.
DIFFERENCES BETWEEN BROKERS AND JOBBERS
- Brokers deals with general public directly while jobbers are not allowed to deal with general public directly.
- Brokers earn a commission while jobbers earn a turn known as profit.
- Brokers are agents (don’t buy securities in their own needs) while jobbers are principles. buy shares in their own name.
- Brokers deal in the retail market while jobbers are wholesalers.
- Brokers operate in both primary and secondary market while jobbers are more active in secondary market.
Underwriters/ underwriting
A merchant or a banker who agrees to buy all those shares that have not been subscribed. Ensures that over and under subscription is catered. The underwriter ensures that all the new issues are successful.
Blue chips – this are first class securities and are shares of companies that have a sound reputation and are internationally reputable and have a good dividend record and their securities are highly demanded in market e.g. safaricom,equity and kengen.
Going short or long on a share – this is the process of selling(going short) or buying(going long) on a share that one does not have/own.the aim is to make a gain from assumed change in market value of shares.the practice is not allowed in Kenya.
Par-value – this is value of shares printed on the face of share certificate(actual share holding of company).
Dividends – this is the profit that is distributed to the shareholders.
Market value – this is the price quoted at the securities exchange and this is the price at which company shares are traded at the securities exchange.
Speculation – this is the expectation about future changes in share prices.
Rights issued/issues – this is an opportunity given to existing shareholders to buy additional shares from the company usually at a lower price before they are issued to members of public.
Bonus issues/issued – this is where existing shareholders are issued with free shares out of the retained earnings.
Ex-dividend(ex-dv) – this is where the person buying shares does not receive the right to receive dividends.
Cum-dividends – this implies that shares sold to buyer give the buyer rights to receive dividends if they are declared.
Ex–rights – this means that the person buying shares does not receive the right to buy additional shares from the company at a lower price if such an opportunity is made available.
Cum–rights – this is where the person buying shares receives the right to buy additional shares from the company if such an opportunity is made available.
