Savings, Money, Finance, Specialist

Equities

Equities or Ordinary Shares are by far the most important type of security issued by UK Companies. Shares are purchased and sold by private investors, large companies and institutions such as life assurance companies and pension funds.

The private investor buys equity or shares in the hope that they will increase the value of their capital and receive a regular dividend income.

Public Limited Companies quoted on the stock exchange market issue shares which can be ordinary, preference, convertible preference and warrants, as risk capital and loan stock

Each Ordinary Share will have a nominal value, such as 0.25p. This will no why reflect the market value of the share which could be 0.75p

The Financial Times produces daily lists indicating the share price of most companies whose shares are traded in the London Stock exchange. The shares are divided typically in to 43 sectors including Finance, leisure, Entertainment & Hotels etc.

Types of Ordinary Share

(a) Ordinary Share -The purchase of an ordinary share in a company allows the investor the right to a dividend, if paid and the right to see annual accounts. For companies listed on the London stock exchange they must provide a half-yearly results which will indicate the size of the dividend being offered. Each share carries one vote and the share holder has the right to attend and vote at the annual general meeting.

(b) Deferred Ordinary Share -These Shares are rare these days. They may give rise to greater voting rights or rights to a higher dividend.

(c) Golden Shares - These are shares held by the government in companies that have gone through privatisation. This allows casting votes should they need to. Golden shares have a time limit and most have already expired.

>>Trade in with profit endowments .