Financial Terms
A way to boost the company’s share price in the market, and also to avoid ownership by small investors. It is often done when the company’s share price is low and is a type of window dressing.
The nominal value of investors’ equity interests in the company or its ordinary shares. Authorised share capital represents the nominal value of shares the company may issue, while issued share capital represents the number of shares the company has already issued. The concept of share capital often extends to include the company’s preference (preferred) shares.
The steps followed in recording business transactions, which begin with recording in the journal, then posting to the ledger, then preparing the trial balance, and end with preparing the financial statements
These are the principles, rules, and procedures needed to define the practice of accounting at a given time, and trust in these principles depends on their general acceptance by those working in the accounting profession.
The final output of the accounting process, containing a summary of financial positions. Key accounting statements include the income statement, the balance sheet, and the cash flow statement.
Accounts payable is an accounting account that represents a company’s obligation to settle a short-term debt owed to its creditors. On many balance sheets, accounts payable is listed under current liabilities.
Amounts representing claims against customers recorded in open accounts (current accounts), and usually refers specifically to amounts arising from the sale of goods or trading services
A corporate transaction in which one entity obtains ownership or control of another, either through the purchase of its shares, assets, or through a merger arrangement.
An investment approach typically used to achieve returns on investment higher than prevailing market returns.
Any ownership position or arrangement of shares or stakes, regardless of percentage, that leads to control over the appointment of the majority of board members or over decisions issued by the board or the general assemblies of the company in question
Investments directed toward establishing government institutions and entities to maintain and advance societies.
Providing advice to another person in connection with a security. This includes advising on the merits and risks of dealing in it, exercising any rights associated with it, and on financial planning and wealth management related to it.
A contract by which the client (principal) appoints the institution as an agent to execute tasks on their behalf, which may be remunerated or gratuitous.
A contract whereby takaful participants or retakaful participants (principals) appoint a takaful operator or retakaful operator (agent) to carry out underwriting and investment activities for takaful funds on their behalf in exchange for a known fee.
The annual audit of an entity’s financial statements by a certified auditor and the issuance of their report on the financial statements.
A set of financial statements required to be issued annually that show the financial position of an entity, typically consisting of the balance sheet, income statement, statement of changes in equity, and cash flow statement
A comprehensive document published each year by a company or fund, summarising its financial performance, strategic direction, governance practices, and audited financial statements for the fiscal year.
Arbitrage refers to the purchase of a security in one market and its sale in another market, aiming to benefit from the price difference between the two markets to generate profits without exposure to risk. These transactions are typically executed between the futures market and the spot market.
This is where a person introduces others in connection with an offering of securities, arranges for its underwriting, or provides corporate finance advisory services.
Bond and stock prices are quoted as bid and ask prices. The ask price is the higher of the two and is the price an investor pays when purchasing.
Asset protection is the process of safeguarding an entity’s assets through an internal control system. This process aims to ensure the integrity of the entity’s owned assets—such as cash, equipment, inventory, and data—from loss, misuse, or embezzlement. This is achieved through the implementation of control policies and procedures, including segregation of duties, documentation and auditing, periodic review, and the use of technical systems that monitor and document financial and administrative operations.
Asset valuation is the process of estimating an asset, investment, or security. This process utilizes fundamental data for the asset or investment being valued, such as: the asset’s future cash flows, prevailing discount rates, and any data affecting the cash flows from the asset being valued.
Everything owned by individuals, companies, or institutions that has value, whether tangible such as cash, equipment, buildings, and machinery, or intangible such as goodwill or a trademark.
A company is considered an associate when another company directly or indirectly holds an ownership interest of more than 20% and not exceeding 50% of its share capital, or if it has significant influence over its decisions.
The opinion issued on an entity’s financial statements, as presented in the auditor’s report, and resulting from the performance of necessary audit procedures in accordance with relevant auditing standards.
One of the generally accepted auditing standards, also included in the International Standards on Auditing. The term means that the certified public accountant (auditor) must not be biased and must remain neutral—whether toward the client or any other party—when performing the audit function.
Individuals and institutions licensed by the Saudi Capital Market Authority (CMA) to conduct capital market activities, including dealing in securities, managing investments, providing financial advice, and operating exchanges.
The number of shares of the capital stated in the company’s articles of incorporation; this number is usually shown in the capital accounts section of the company’s balance sheet.
The approved and registered capital of a joint-stock company, as recorded by the official authorities.
These are investment funds whose primary investment objective is to invest all their assets in other investment funds.
The Saudi Arabian Monetary Agency classifies the licenses granted to this type of institution into two categories, based on the different activities provided by these institutions, as follows:
Category (A): Exchange currencies; buy and sell foreign currencies; buy and sell travellers’ cheques; and transfer funds within and outside the Kingdom.
Placing the debtor’s assets under judicial receivership, to be managed and utilized for the benefit of creditors, sold under the supervision of the bankruptcy trustee, and the proceeds distributed to them until the debtor’s obligations are fulfilled.
A share issued without the investor’s name; its bearer is considered its owner.
Shares for which the owner’s name is not recorded on the ownership certificate, akin to banknotes issued by the Saudi Arabian Monetary Authority. Consequently, the shareholder must safeguard the ownership certificate, as it constitutes the sole proof of ownership.
Any person who has an interest representing 5% or more of the capital of a company listed on the stock exchange, whether directly or indirectly, as a group, or in alliance with others.
Bond and stock prices are quoted as a bid price and an ask price. The bid price is the lower of the two and the price the investor receives when selling.
Contains several specialized articles on financial knowledge.
Securities issued by a stable company with an excellent earnings record, a leading market position, and strong future growth and stability prospects. Consequently, their prices are not subject to significant fluctuations.
A fixed-income debt instrument issued by a government or corporation to raise capital, committing the issuer to pay regular interest (coupon) payments to bondholders and to repay the principal at maturity.
Fixed-income markets—the part of the global financial system where debt instruments are bought and sold.
Issuance of bonus shares to current shareholders without payment of any cash amounts, resulting in a proportional decrease in the share price based on the number of new shares. This issuance is also known as capitalization of profits.
A price discovery process used in initial public offerings (IPOs) and other securities issuances, in which the underwriter or lead manager collects and records investor demand and bids at various prices to determine the final offering price.
It is the value of total equity (shareholders’ equity), excluding preferred shares, divided by the number of outstanding common shares.
It is the price closing above a resistance level or below a support level.
A general upward trend in stock prices, typically occurring over a period of months or sometimes years. A buoyant market is often driven by increased trading volume.
A dynamic sector that seeks cooperation among companies, ensuring that the perspectives of the sector’s various components are taken into account.
The business cycle refers to the phases an economy goes through periodically, including periods of growth, peak, contraction, and recession. Studying this cycle helps in understanding economic changes and making appropriate decisions in the areas of monetary and fiscal policy.
The price that must be paid to the bondholder when redeeming the security before the maturity date. This price is usually equal to the par value plus a call premium.
A debt security that the issuing company retains the right to redeem before the loan’s maturity date for the purpose of repayment (redemption). This occurs when general interest rates in the financial market fall below the fixed interest rate on the bond.
A type of bond issued by companies or issuing entities that includes a condition granting them the right to call the bond, meaning to repay it in full before the specified maturity date according to pre-stipulated conditions in the issuance contract. This call is typically made when market interest rates fall, allowing the issuer to refinance at a lower cost.
Bonds that give the issuer the right to call all or part of the bonds before the maturity date.
Long-term assets used in the production of goods or services and not intended for sale in the ordinary course of business. Examples include property, plant, equipment, and intangible assets.
A tax levied on profits realized by individuals from the sale of certain assets.
These are the gains (losses) resulting from the price differences in the sale and purchase of securities.
A financial process undertaken by companies to raise additional funds through the issuance of new shares or the conversion of debt into equity. It is utilized to finance expansions, cover financial deficits, or strengthen the company’s financial position.
The trading of all securities, including the organized electronic buying and selling of securities, known as the (Financial Market) in the Kingdom of Saudi Arabia. It includes: the organized market and the over-the-counter market.
A fund whose primary investment objective is to protect the capital invested by unitholders and return it to them at a predetermined future date.
A fund whose primary investment objective is to protect the capital invested by unitholders and return it to them at a predetermined future date.
Issuance of additional shares to existing shareholders, fully paid from the issuer’s reserves, proportionate to their current holdings.
A corporate action in which a company sells a minority stake in a subsidiary through an initial public offering while retaining a controlling interest in the subsidiary.
A method of recording revenues and expenses when cash is received or paid, rather than when they are earned or incurred.
Cash deposited by a party as security or margin to cover potential losses on a financial transaction, ensuring the other party against counterparty credit risk.
Profits distributed by the company to its shareholders as cash amounts, which may be paid annually, semi-annually, or quarterly.
These are profits distributed by a company to its shareholders in cash, according to specific schedules, which may be quarterly, semi-annual, or annual.
The movement of cash into or out of the entity.
The section of the cash flow statement showing cash movements related to the entity’s capital structure, including proceeds from issuing shares or debt instruments and payments of dividends or repayment of loans.
The section of the cash flow statement reflecting cash used to acquire or dispose of long-term assets and other investments, such as the purchase or sale of property, equipment, or securities.
The section of the cash flow statement showing cash generated from or used in the principal revenue-producing activities of the entity, such as receipts from customers and payments to suppliers and employees.
Shares whose value is paid by the shareholder in cash. Examples of these shares include company shares and commercial bank shares, which laws in some countries stipulate must be paid in cash and not in kind.
The party to a retakaful or reinsurance contract that transfers part of the risks under the retakaful or reinsurance contract.
The primary monetary authority of a country, responsible for issuing currency, managing monetary policy, maintaining financial stability, regulating the banking sector, and acting as lender of last resort. In Saudi Arabia, this is the Saudi Central Bank (SAMA).
A document issued by the bank to the depositor stating the deposit amount, its term, and the interest on it.
A document issued by the bank to the depositor stating the deposit amount, its term, and the interest on it.
Financial statements classified into groups such as current assets, fixed assets, current liabilities, long-term liabilities, and owners’ equity
Audit procedures carried out after the trade is executed and before settlement.
The entity responsible for conducting clearing operations for a large number of parties.
An official document issued by a clearing house to its members, summarising net obligations, margins, and settled positions arising from securities or derivatives transactions.
A company in which subscription to its issued shares is limited to its founders.
It is a company, not a fund, that invests in a variety of investments.
Units of closed-end investment funds are traded on the stock market, similar to shares. The invested value can only be recovered by selling these units to another buyer, as their total number of units remains fixed.
A joint real estate investment fund designed to offer investors the opportunity to collectively participate in its profits. It is managed by a fund manager for specified fees. These funds operate according to the following objectives:
Initial development and subsequent sale.
Construction development and subsequent sale.
Initial or construction development for the purpose of leasing for a defined period, followed by sale.
A joint real estate investment program designed to allow its investors to collectively participate in the program’s profits. It is managed by a fund manager for specific fees. These funds operate according to the following purposes:
- Initial development followed by sale.
- Construction development followed by sale.
- Initial or construction development for the purpose of leasing for a specified period, followed by sale.
Commonly used in closing price – closing day – naturally in relation to trading and transactions.
Assets used to secure loans.
Financial institutions that accept deposits from the public, provide lending and credit facilities, and offer a broad range of financial services to individuals, businesses, and institutions.
Similar to a stock exchange, it is where supply and demand forces meet and prices are determined. However, it differs from a stock exchange in that trading on a commodity exchange involves the assets themselves (commodities), such as oil, metals, and others.
A share of a public company’s capital, common shareholders are entitled to voting rights and receive a share of profits after preferred shareholders have been paid.
A security that represents a portion of ownership in an institution or company, equal to its value or total value based on the number of shares
It is a security that represents a share in the capital of a joint-stock company. It grants the investor several rights, most notably: the right to attend general assembly meetings, to receive dividends if distributed, and it also grants the right to vote and priority in subscribing to shares.
It is the process by which a company’s existence is terminated and it is liquidated. This involves: selling assets, settling liabilities and paying preferred shareholders, and then distributing any remaining balance from the assets to common shareholders.
The company’s book value is the net value of its assets, or total assets less liabilities. It is considered one of the indicators investors use to evaluate company shares.
Financial statements containing figures for the current year in addition to figures for the previous period or periods, allowing a comparison between them.
Interest calculated cumulatively so that its value increases over the years, calculated based on the total amount representing the original invested principal plus previously earned interest.
An official written or electronic notification sent to a client confirming the details of an executed trade, including the security traded, quantity, price, settlement date, and total consideration.
A financial statement that combines the assets, liabilities, and operating accounts of the parent company and its subsidiaries to present their financial position as if they were a single entity. It is prepared by aggregating like accounts after eliminating intercompany transactions and balances.
A financial statement combining the revenue, expenses, and net income of a parent company and its subsidiaries, presented as a single unified report.
The ability to influence the actions or decisions of another person, directly or indirectly, individually or jointly with a relative or affiliate, through any of the following: (a) owning an interest equal to 30% or more of the voting rights in a company; (b) the right to appoint 30% or more of the members of the management body. The term “Controller” shall be construed accordingly.
A shareholder who owns a majority of the shares, i.e., 51% or more.
Debt securities issued by companies, with the right to convert them into a number of ordinary shares in the same issuing company at a pre-determined conversion ratio.
Debt securities issued by companies, with the right to convert them into a number of ordinary shares in the same issuing company at a pre-determined conversion ratio.
Corporate governance refers to the system through which rights and responsibilities are defined among various parties, such as the board of directors, managers, shareholders, and other stakeholders in the company.
The acquisition of a company, typically against the wishes of its current management or board of directors, by purchasing a controlling stake of its shares on the open market or through a direct offer to shareholders.
A movement that goes against the stock’s trend. If the trend is upward, this movement is downward; if the trend is downward, this movement is upward.
These are all the direct costs incurred by the company in the process of production or purchasing the goods or services that the company sells. These expenses may include, for example, production costs, marketing, employee salaries, and others.
A bearer bond with attached coupons used to claim the stipulated interest.
A type of bond backed by a pool of high-quality assets (such as mortgages or public sector loans) that remain on the issuer’s balance sheet. If the issuer defaults, bondholders have recourse to both the issuer and the underlying asset pool.
This type of institution facilitates commercial credit decision-making by collecting and analyzing demographic information and other financial and non-financial variables available in credit reports to assist credit grantors or related entities in extrapolating customers’ credit behaviors based on mathematical models that use credit report variables and data as key inputs to support credit decisions. There are only two companies in the Kingdom providing credit information: SIMAH and Bayan Credit Information Company.
An independent assessment of the creditworthiness of an entity (corporation, government, or financial instrument), issued by a licensed credit rating agency. Ratings indicate the likelihood of timely repayment of financial obligations and range from investment grade to speculative/sub-investment grade.
One of the terms used to describe the global financial crisis, among many other terms circulated in economic circles: turmoil, recession, downturn, stagflation
Crowd psychology revolves around one goal: achieving profits. They think only of profits, and therefore crowd psychology is extremely greedy at market peaks due to realized profits and positive news, and extremely pessimistic at market bottoms due to realized losses and negative news.
A method of raising capital by collecting small contributions from a large number of individuals, typically through an online platform. Crowdfunding may be equity-based, debt-based, or reward-based.
A term meaning “stock with dividend” indicating that the company intends to pay stock dividends in the near future.
A class of preferred shares characterized by the accumulation of unpaid dividends from any period, which are then paid in the future when possible. Dividend distributions on these shares have priority over distributions on common shares.
A type of voting in which a shareholder is granted a number of votes for candidates equal to the number of candidates multiplied by the number of shares they own — and the total votes can be given to a single candidate.
An asset that is used, disposed of, or converted into cash within one year or less, or within the entity’s operating cycle, such as cash, inventory, accounts receivable, and short-term investments.
Assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business. Includes cash, receivables, and inventory.
The price of the last trade executed on the security during the last business day.
The portion of the company’s shares offered for subscription from the authorized capital
Financial obligations expected to be settled within one year or within the entity’s normal operating cycle, including accounts payable, short-term loans, accrued expenses, and the current portion of long-term debt.
A legal entity licensed by the Authority to engage in the safekeeping of clients’ funds and assets, including those comprising collective investment schemes.
The service of holding and safeguarding securities and other financial assets on behalf of clients by a licensed custodian, which is responsible for settlement, corporate action processing, and record-keeping.
Stocks of companies that mirror overall economic performance, as their revenues and profits—and consequently their stock prices—rise when the economy is booming, and conversely, their revenues and profits—and consequently their stock prices—decline when the economy is slowing down or in recession.
The act of buying or selling financial securities or instruments on behalf of oneself or clients, forming the core activity of licensed brokers and dealers.
A commercial bond issued in the local bond market without any collateral.
Debt is a financial obligation that requires one party (an individual or institution) to repay a sum of money to another party at a later time, often including interest. Debt is used as a financing tool to enable companies to expand or individuals to cover their needs, and is subject to contracts that specify repayment terms.
A crowd-funding model in which investors provide loans to borrowers through an online platform, receiving repayment with interest (or a profit margin under Islamic finance structures).
The sale by a creditor of their debt to a third party. The debt may be money or specified goods held as an obligation, in accordance with Sharia provisions.
An instrument used in some countries in lieu of a mortgage, where a property title deed is deposited with one or more trustees to secure the repayment of an outstanding amount or the fulfillment of other conditions.
A stock that is not expected to decline in return during periods of recession, and may even achieve a return exceeding the market rate. It typically represents shares of a company whose business is not tied to the general state of the economy or fluctuates with the business cycle resulting from that state, and is therefore viewed as a lower-risk stock.
Expenses that have been incurred and offer future benefits extending beyond one year — and are therefore capitalized and recorded as an asset.
A type of share for which dividend payments are deferred until dividends are paid to another class of shares or a specific obligation of the company is fulfilled.
A class of shares that explicitly stipulates the deferral of dividend payments until another class of shares receives its share or after a specific obligation of the company is paid
A situation where the fund’s liabilities exceed its assets, resulting in the fund being in a debtor position.
A contract requiring the safekeeping of property in trust and its return upon request. It may be with or without a fee. It is held in trust by the depositary, who is not liable for it except in cases of misconduct, negligence, or breach of the agreed contractual terms.
A wide range of complex products are traded in derivatives markets based on the prices of underlying financial instruments, including currencies, indices, interest rates, equities, commodities, and credit risk. Futures and options are the most well-known derivatives.
A transaction in which a broker or dealer buys or sells securities using its own account rather than acting as an agent on behalf of clients.
It is the provision of and ensuring access to all information relevant to capital market investors, delivered with the necessary timeliness and accuracy. This encompasses information pertaining to the disclosure of interests, financial data, material information, or decisions that affect the movement and price of traded securities.
An account with a broker that grants them the freedom to buy or sell without prior approval or knowledge of the client. Some clients set certain limits, such as investing only in blue-chip stocks.
Divergence occurs when technical analysis indicators or trading volumes fail to confirm price movement, thus deviating from it. For instance, during an uptrend, prices may rise while indicators form lower highs, which is known as negative divergence. Conversely, during a downtrend, prices may fall to lower lows while indicators form higher lows, which is termed positive divergence.
An investment risk management strategy of spreading capital across a variety of assets, sectors, geographies, or instruments to reduce the impact of any single investment’s poor performance on the overall portfolio.
A dividend is the portion of a company’s earnings distributed to its shareholders as a return on their investments. Dividends are distributed in the form of cash or shares, and their distribution can be quarterly, semi-annually, or annually. The announcement of dividend distribution is often made upon the recommendation of the company’s board of directors.
Dividend Distributions by the Company
The total amount of dividends declared by a company for each ordinary share outstanding, calculated by dividing total dividends paid by the number of shares.
An amount taken upon signing the contract, considered part of the price upon execution of the contract, and as compensation if the contract is terminated.
A status in which an investor or institution meets the eligibility criteria for participation in two separate regulatory categories, markets, or programmes simultaneously.
It is the reconciliation of the unit price calculated according to the financial statements, in which expected credit losses are recorded on the fund’s financial statements, with the unit price calculated for trading purposes.
The portion of profits attributable to each common share, calculated as follows: net profit (net income) divided by the number of outstanding common shares.
The path the economy typically follows, as economic growth fluctuates over time. The economic cycle is also referred to as the business cycle.
Economic feasibility is an analytical process to determine whether a proposed project or investment will generate returns that exceed costs. This analysis includes a market study, expected costs, potential returns, and risks associated with the project, and is used as a basis for making financing and implementation decisions.
Growth in the value of Gross Domestic Product ((GDP or Gross National Product GNP)), expressed in real terms, typically measured over a full year, and used to indicate the health and well-being of the economy.
It refers to any production of goods and services, whether for consumption or investment, including projects related to agricultural, industrial, and other activities.
It is a market that is highly responsive to events, such as a political statement, a change in a company’s CEO, an accusation against a company’s board of directors, and other similar occurrences, provided that transparency, disclosure, and integrity are present.
The use of digital platforms and computer-based systems to execute buy and sell orders for financial securities, replacing traditional open-outcry trading floors.
Commencing a transaction that places the investor in a short selling or margin buying position.
Equity is the company’s total assets minus its total liabilities. It is one of the most common financial metrics analysts use to determine a company’s financial health. Equity represents the company’s net worth or the amount that would be returned to shareholders if all company assets were liquidated and all its debts paid off.
A crowdfunding model in which investors receive equity shares (or ownership stakes) in a company in exchange for their financial contribution.
Funds that primarily invest in shares of companies listed on financial markets, whether local, international, or regional.
A financial ratio used to measure a company’s efficiency in using equity to generate revenue. It is calculated by dividing net sales by average equity over a specific period. This ratio reflects the company’s ability to convert shareholder investments into sales. The higher the ratio, the greater the effectiveness in using owned capital to achieve business growth.
A contract or instrument deposited with a third party and delivered to the beneficiary only upon fulfillment of certain conditions
Debt securities denominated in a currency different from the currency of the country in which they are issued, traded across international capital markets. Despite the name, Eurobonds are not limited to European currencies or markets.
A network of European stock exchanges resulting from the merger of the Paris, Brussels, Amsterdam, and Lisbon exchanges, and later with the New York Stock Exchange (NYSE). It is now part of Intercontinental Exchange (ICE).
A term meaning that an investor who buys shares on the ex-date is not entitled to receive the dividends declared for the completed financial period. It’s the date after which the stock is traded without the entitlement to those dividends.
The period during which an investor entering into a purchase of stocks or bonds (for which dividends or interest (coupons) have been previously announced) is not entitled to receive those dividends or interest to be distributed.
A pattern of frequent buying and selling of securities in a client’s account by a broker or manager, often motivated by commission generation rather than the client’s best interest. It is considered a market conduct violation.
The rate at which one currency is exchanged for another.
An index fund whose units are traded on the “Main Market” or “Parallel Market”.
A takaful company or re-takaful company established and owned, directly or indirectly, by one or more industrial, commercial, or financial entities. Its purpose is to provide takaful or re-takaful coverage for the risks of the entity or entities to which it belongs, or for entities associated with those entities, and only a small part of its risk exposure, if any, is related to providing takaful or re-takaful coverage to other parties.
The completion of a buy or sell order for a security at an agreed price by a broker or trading platform on behalf of a client.
The price at which an investor can exercise the right granted by the option under the option contract.
This is a price gap that appears at the end of a trend, accompanied by large to medium trading volumes, and is typically filled within two days to a week. In this state, the market is exhausted and cannot sustain its upward movement despite strong optimism during an uptrend, or its downward movement despite strong pessimism.
The costs incurred by a company during the course of its business operations. Expenses are divided into revenue expenses and capital expenses. Revenue expenses include: costs incurred by the company during the accounting period. Capital expenses include: costs whose impact extends beyond one accounting period.
Kayan provides, according to its size and capacity, Shariah advisory services that include Shariah review and audit services, as well as advice related to developing products that comply with Shariah provisions, as part of its professional services.
Factoring is the process of selling an entity’s gross accounts receivable without recourse to another party (the debt buyer). This means the buyer assumes all risks associated with collecting the debts. Some banks and financial institutions purchase these debts, typically at a discount from the face value of each account. Customers then make payments directly to the buyer (after being notified by the selling entity).
The price that reflects all current and future economic and financial fundamentals of the company, determined through assumptions and expectations about the company’s future performance.
The fair value is determined based on the company’s assets, dividends distributed to shareholders, future growth rates, and the efficiency of company management (the intrinsic value of the share).
Jurisprudential opinions issued by the Sharia Supervisory Board regarding Sharia matters in accordance with appropriate methodology
An investment fund whose primary investment objective is to invest all its assets in another investment fund.
Risks arising from an institution’s failure to perform its duties in accordance with explicit and implicit standards applicable to its fiduciary responsibilities
Finance companies in the Kingdom are divided into two categories:
- Companies licensed to conduct real estate financing activities: These companies operate under the supervision of the Saudi Arabian Monetary Authority (SAMA), providing various financing services for real estate activities of all kinds.
Companies licensed to conduct real estate financing activities: These companies operate under the supervision of the Saudi Arabian Monetary Authority (SAMA), providing various financing services for real estate activities of all kinds.
These are the actual cash amounts spent on the production inputs used to produce specific quantities of a particular product.
A financial advisor is an individual or entity that provides financial advice to another party for a fee. This can also refer to a financial or banking institution, such as commercial banks offering consultations to companies interested in mergers and acquisitions.
The evaluation of a company’s financial health and performance using financial statements and related data, including profitability, liquidity, leverage, and efficiency ratios.
An institutional activity encompassing commercial banks, corporations, savings banks, and other financial institutions, as well as securities brokerage firms.
Options contracts, futures contracts, and swaps; where their price is derived from the underlying asset of the contract.
Providing important information to investors and the public transparently, such as financial statements and periodic reports, to enable them to make informed decisions.
The use of financial instruments — such as forwards, futures, options, or swaps — to offset or mitigate specific financial risks, including currency risk, interest rate risk, and commodity price risk.
The inability of a company to meet its obligations when they become due.
Any contract that creates a financial asset for one entity and a financial liability or equity instrument for another. Examples include shares, bonds, sukuk, derivatives, and certificates of deposit.
Assets or financial products that you invest in—such as stocks, bonds, real estate, or options—with the aim of generating returns or capital gains in the foreseeable future.
A party that handles investors’ buy and sell orders in return for a service commission. A broker specializing in stocks and bonds acts as an agent on the client’s behalf.
The process of deploying capital into financial wealth-generating instruments (such as stocks, bonds, and others), rather than investing in wealth itself (real assets). It is also known as personal investment.
These are used to derive indicators for the mathematical relationship between one quantity and another. There are several types of ratios, such as those that assess an entity’s liquidity, its ability to repay debts, return on investment, operational performance, asset utilization, and market measurements.
Financial statements serve as a written guide to an entity’s financial position.
The objective of an audit of financial statements for an entity is to express an opinion on whether the financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework.
A transaction in which a special-purpose entity obtains financing by issuing debt instruments. This includes acquiring the assets needed to generate the returns due under the debt instruments, or transferring or otherwise using those assets — and it also includes the issuance of the debt instruments themselves.
Using government spending policies, taxation, and borrowing to either boost domestic demand in the economy or restrain it, with the aim of maintaining high employment and price stability.
This is a company’s accounting year. The period covered by the fiscal year varies from one company to another — for most companies, the fiscal year runs from January 1 to December 31, while for some, it runs from June 1 to May 31.
Long-term assets held for use in the entity’s operations and not intended for sale in the ordinary course of business. Also referred to as property, plant, and equipment (PP&E).
Costs that are not affected by changes in the volume of activity or production in the establishment, unlike variable costs, such as rent, lighting, heating, and maintenance costs
An investment category comprising securities that pay a regular, predetermined income stream to the holder. Traditional examples include bonds; in Islamic finance, sukuk are the Sharia-compliant equivalent.
Set by the manufacturer or wholesalers with retailers to prevent competition among them, through an agreement between the manufacturer and the retailer that the latter will not sell the former’s products for less than the agreed price.
These are fixed-income securities — specifically bonds and treasury bills — all of which guarantee a fixed interest-based return, with the principal repaid at maturity.
Debt instruments issued with a coupon interest rate that changes based on a benchmark interest rate.
A force arising from natural disasters that prevents parties from fulfilling their obligations.
The compulsory sale of an investor’s assets or securities by a broker or lender when the investor fails to meet a margin call or maintain the required collateral level, to recover funds owed.
Forex markets (foreign exchange or FX)
facilitate the exchange of one currency for another and determine exchange rates that reflect the relative value of different currencies. Participants engage in foreign exchange trading for various purposes, including international trade, investment, speculation, and risk management.
A foreign legal person that aims to acquire a direct ownership stake in the shares of a listed company for a period of not less than two years, for the purpose of contributing to enhancing the financial or operational performance of that listed company.
Term abbreviation: foreign exchange trading (Forex); foreign currency trading.
A derivative contract that creates a legally binding obligation between two parties, whereby one party commits to buy a predetermined amount of an asset and the other commits to sell it at a predetermined price and on a predetermined future date. Since forward contracts are negotiated individually, they are not traded on derivatives exchanges.
The foreign exchange rate determined today under a forward contract and agreed to be applied to a foreign exchange transaction by a predetermined future date
An Islamic lease contract for a service or use of an asset that does not yet exist or has not yet been created, but is precisely described. The lessor undertakes to deliver the described usufruct at a future date. It is used in project financing for assets under construction.
It is a transaction that is settled later than the regular settlement dates for a specific commodity or instrument.
A situation in which a debtor claims to be bankrupt and misleads others into believing so, in order to stop them from demanding repayment of the amounts owed to them.
The cash generated by a business from its operating activities after deducting capital expenditures required to maintain or expand the asset base. Free cash flow represents funds available for distribution to investors, debt repayment, or reinvestment.
The proportion of a company’s total shares that are freely available for public trading on a stock exchange, excluding shares held by controlling shareholders, strategic investors, and government entities that are not regularly traded.
A procedure intended to convert a portion of capital from a liquid or circulating state to an immobile or non-immediately usable state, by allocating it to long-term assets or fixed investments. Freezing typically occurs when working capital (such as cash or current accounts) is replaced with fixed capital (such as real estate or equipment), thereby reducing the entity’s ability to respond quickly to obligations or operational opportunities.
The principle of completeness means that financial statements must be complete and comprehensive, encompassing all necessary and required information to guide their users in decision-making.
Refers, wherever mentioned in the Investment Funds Regulations and the Real Estate Investment Funds Regulations, to a maximum period of six months from the day following the fund’s termination date, during which the fund’s assets must be fully liquidated in accordance with the provisions of the Investment Funds Regulations and the Real Estate Investment Funds Regulations.
Compensation, expenses, and fees related to advisory services paid to the fund manager.
An investment fund whose primary investment objective is to invest all its assets in another investment fund.
Wherever mentioned in the Investment Funds Regulations and the Real Estate Investment Funds Regulations, it refers to the date on which the fund terminates in accordance with the period or event specified in the fund’s terms and conditions, including the phase of selling assets and distributing entitlements to unitholders.
A method of evaluating a security’s intrinsic value by analysing related economic, financial, and qualitative factors, including a company’s earnings, balance sheet, management quality, competitive position, and macroeconomic environment.
An agreement to buy or sell an asset on a specified future date at a price agreed upon today. A futures contract differs from a forward contract in that it is a standardized contract with specific specifications, and can therefore be traded on an exchange.
An organized market where trades (contracts) are concluded on specific assets or securities to be executed in the future, with oversight mechanisms and trading systems that differ from other securities markets.
Currency exchange market for futures. Futures price: where the price is agreed upon now with delivery of goods to occur in the future, which is used in cases of currency trading, securities, and commodities in commodity exchanges. This is often linked to spot delivery.
A gap is a price area on the chart where no trading has occurred. An upward price gap occurs when the lowest price of today’s session is higher than the highest price achieved in the previous session. A downward price gap occurs when the highest price of today’s session is lower than the lowest price achieved in the previous session.
An amount retained from a company’s profits at the discretion of its board of directors, rather than being legally required. It may be used for future investment, contingencies, or dividend smoothing.
A formal meeting of a company’s shareholders at which key corporate matters are deliberated and voted upon, including the approval of financial statements, election of board members, dividend distribution, and major corporate decisions. May be ordinary (held annually) or extraordinary (called for specific purposes).
A document, often in the form of a ledger, maintained by a specific entity or individual to record (document) important information such as names, places, items, and events. At the end of a defined period, the information is summarized and organized into data for submission to relevant parties.
Paying money or providing an asset to another party without consideration.
It is largely evident in futures and options trading, where settlement is conducted through multiple channels involving one or more parties, each situated in a different position.
It can be theoretically defined as the present value of a company’s future earnings that exceed the earnings of other companies in a particular field. In other words, it is the value of the company’s name, reputation, customer relationships, and other intangible factors that enhance its competitive position and ability to generate extraordinary profits in the future.
It is the total monetary value of all final goods and services produced by the economy during a specific period of time, typically one year
Gross Domestic Product (GDP) is the total monetary value of all goods and services produced within a domestic economy during a specific period. It comprises private consumption, private investment, government expenditures, and net exports.
Gross profit margin is calculated by dividing the total sales value, after deducting the cost of sales, by the total sales value, and is expressed as a percentage. For example, if a company’s sales are SAR 100,000 and its cost of sales is SAR 75,000, its gross profit margin is 25% (calculated as (100,000 – 75,000) / 100,000).
Investment growth is the increase in the financial value of invested assets over time. Unlike investments that provide a fixed income return, some investments do not aim for this, but rather to achieve a sustained increase in the financial value of the invested assets over time.
The term refers to stocks of small companies that have no prior earnings history. They are valued based on expected future earnings and thus have high profitability ratios. They grow at faster rates than similar companies in the same industry. These stocks are high-risk because capital gains come from speculation, especially in small companies with emerging industries.
A risk management strategy in which an investor takes an offsetting position in a related security or derivative to reduce the potential loss from adverse price movements in an existing holding.
Assets that exist on a company’s books but are not fully reflected in its publicly disclosed financial statements, either due to conservative accounting practices or deliberate concealment.
The highest price recorded for a security during a specific period.
The highest price a stock has reached during a specific trading period or periods, which may be a day, month, or year
In highly efficient markets, the prevailing security prices at a given moment reflect not only published information, but also everything that can be known about the company, including its internal information. A market is described as highly efficient if the market value of any security reflects its true value, meaning that the market prices securities as they should be.
The parent company that holds a controlling stake in a subsidiary, giving it voting rights and control over the subsidiary’s operations.
An acquisition in which the acquiring company takes over another company operating in the same industry and at the same stage of the supply chain, typically to increase market share or achieve economies of scale.
An Islamic finance contract in which the owner (lessor) transfers the usufruct (right to use) of an asset to a lessee for a defined period in exchange for agreed rental payments. It is the Islamic equivalent of a lease and does not involve the transfer of ownership unless combined with a purchase agreement.
An Islamic financing arrangement combining a lease (Ijarah) with a separate promise to transfer ownership of the leased asset to the lessee at the end of the lease term, either through a gift, nominal purchase, or gradual purchase structure. It is functionally similar to conventional hire purchase or finance leasing.
Means any of the following: Fixed assets; financial resources not immediately convertible to cash; deposits not available for withdrawal within three months or less.
Referring to real estate properties such as real estate or land, immovable property is permanently fixed in one place and therefore includes the land and everything built on it, as well as everything that grows on the land or exists beneath it. Examples include land, buildings, crops, and mining rights.
Paid using assets instead of cash
Shares whose value is collected in kind, such as machinery, buildings, and land. The nature of these contributions, how they are valued, and the shares issued in exchange are usually determined in accordance with the provisions of the Joint Stock Companies Law.
Selling a commodity for a cash price, then purchasing it back for a deferred price higher than the cash price. Reverse Inah is selling a commodity for a deferred price, then purchasing it back in cash for a price lower than the deferred price
Income is all the money an individual or institution receives as a result of work, investments, or assets. Income forms the basis for assessing living standards and measuring purchasing power, and it is used as a key indicator in financial analysis.
Common shares of companies that tend to pay most of their net profits as cash dividends to their shareholders; for example, utilities companies.
An increase in cost resulting from a change in one of the factors affecting cost, such as production volume, pattern, or distribution area. It also refers to the increase in cost incurred by choosing an alternative operating method over others.
Professional work performed by an independent certified public accountant at an entity by examining its accounting information and financial statements to determine the extent of the entity’s application of generally accepted accounting practices and principles
In the Financial Market Institutions Regulations, an independent member is a non-executive board member who enjoys complete independence in their position and decisions, and to whom none of the impediments to independence stipulated in paragraph (c) of Article Fifty-Three of the Financial Market Institutions Regulations apply.
An index calculated based on the share prices of a specific group of stocks traded on the exchange
An investment fund whose primary objective is to track the performance of a specific index.
A transaction in which a broker acts as an agent for a client, executing trades on their behalf without taking on principal risk.
Funds invested as cash in a company, representing the excess of current assets over current liabilities. Also known as net current assets.
A sustained increase in the general price level of goods and services in an economy over time, resulting in a reduction in the purchasing power of money. Inflation is measured using indices such as the Consumer Price Index (CPI).
The first time a privately held company offers its shares to the general public on a regulated stock exchange. An IPO raises equity capital, provides liquidity to early investors, and subjects the company to ongoing disclosure and governance obligations.
Listing securities on the market, whether on the Main Market or the Parallel Market, or – where the context permits – submitting an application to the market for their listing.
The offering of company shares for public trading (subscription) in the financial market for the first time, representing the transition of company ownership from private to public.
Any person who, by virtue of their position, has access to information or data of material impact about a listed company that is not available to the public
The illegal practice of buying or selling securities based on material, non-public information about a company. It is prohibited under the Saudi Capital Market Law and enforced by the CMA, as it undermines market fairness and investor confidence.
A defined set of relationships between an organization’s management, its board of directors, its shareholders, and other stakeholders, providing the framework through which relationships are organized in accordance with the laws, regulations, and bylaws in force within the organization, and the requirements of regulatory and supervisory authorities.
Formal directives issued by a regulatory authority prescribing conduct, procedures, or requirements applicable to licensed entities and market participants.
In the Kingdom, the insurance sector falls under the money market, unlike most countries, where the insurance and reinsurance sector falls under the capital market in most countries.
Insurance markets specialize in managing personal and corporate risks, and providing protection from life risks.
Non-cash assets that have no physical existence and can provide the entity with services or benefits in the future. The entity acquired the right to them as a result of events that occurred or transactions completed in the past. Intangible assets may be separately identifiable (can be separated from other assets). Examples include incorporation costs, trademarks, copyrights, industrial models and designs, and franchise rights and licenses. Intangible assets may also not be separately identifiable, such as reputation, managerial skills and competencies, and other factors that constitute goodwill.
Intercontinental Exchange manages global futures markets and over-the-counter (OTC) trading markets for energy, agricultural products, stock indices, foreign exchange, and derivatives contracts. It also manages its energy futures contracts through ICE Futures Europe, based in London, and owns LIFFE.
The amount borrowers pay to lenders as compensation for using their money to finance investment of various types or personal consumption. The interest paid represents the lenders’ opportunity cost for not using their money at present and for bearing the risks of lending money.
An independent, objective assurance and consulting activity conducted within an organisation to evaluate and improve the effectiveness of risk management, internal controls, and governance processes.
A transaction conducted between a company and its directors, major shareholders, or other related parties, subject to heightened disclosure and governance requirements to prevent conflicts of interest.
Investments in capital goods (such as new assets like factories, machinery, equipment, and transport required to produce other goods)
A formal inquiry conducted by a regulatory authority — such as the CMA — into suspected violations of market rules, including insider trading, market manipulation, or fraudulent activities.
It is the process of evaluating financial instruments or investment projects with the aim of making informed decisions regarding capital allocation. Investment analysis includes studying historical performance, market conditions, financial indicators, and risks associated with the asset or project, in addition to forecasting stock prices or future returns based on quantitative and qualitative models.
An entity or unit affiliated with a specific body (such as a sovereign wealth fund or a holding company) responsible for managing and developing investments. These arms aim to generate returns through carefully planned strategic investments across various sectors.
A company specializing in providing financing to businesses, either through equity or debt.
A special class of agents commissioned by the investor to buy or sell investments specified by the investor in exchange for a special commission (brokerage) calculated as a percentage of the value of the investments bought or sold
An investment strategy designed to diversify risk by investing in a variety of assets.
A collective investment channel or instrument that aims to invest funds on behalf of investors and provide them with opportunities to participate in the fund’s profits, which are managed by a fund manager for specified fees. An investment fund can be open-ended or closed-ended. The main types of investment funds include equity funds, bond funds, commodity funds, and money market funds.
Expenditure on education, training, health, and development of employees or the workforce, aimed at increasing their productivity, skills, and long-term economic contribution.
Credit that cannot be modified or cancelled by the person who created it without the beneficiary’s consent
The process of offering securities by the issuer (government, government-owned companies, listed companies, or newly established companies) for subscription through the primary market (the “issuances and new subscriptions market”).
Companies sometimes issue shares below par value to encourage full subscription, often due to an urgent need for liquidity. Alternatively, bonds may be issued below par value when their price is less than the prevailing market rate. This latter scenario typically occurs when a company faces financial difficulties and the bonds have a long maturity period.
A formal framework that allows an issuer to raise funds repeatedly over time by issuing multiple series of securities (typically bonds or sukuk) under a single set of established documentation, without needing to file separate prospectuses for each issuance.
Companies sometimes issue shares or bonds at a value exceeding their par value. The difference is referred to as a share premium and is presented under shareholders’ equity on the balance sheet.
The subscription price, which is not necessarily equal to the nominal value of the subscribed shares, as it may be lower or higher
The capital authorized to be issued in exchange for a cash subscription, for services rendered to the company, or for any other property. Issued capital also includes treasury shares that have been reacquired and may be offered for sale again or cancelled.
A sale contract in which the buyer receives goods gradually, usually without agreeing on the price or delivering anything, and payment is settled later after they are consumed; it is similar to a supply contract.
An Islamic finance contract in which one party commissions another to manufacture or construct a specified asset. The price and specifications are agreed upfront, and payment may be made in advance, in installments, or upon delivery. It is commonly used to finance infrastructure and real estate construction.
Job accounting and reporting helps align organizational performance with the plan, ensuring operational control within the entity through estimated budgets.
It is a company whose capital is divided into tradable shares of equal value. A shareholder’s liability is limited to the value of the shares subscribed, and they are not liable for the company’s obligations beyond the nominal value of their subscribed shares.
A group of individuals who unite for the purpose of generating profit and contribute to a capital divided into shares, whereby each owns one or more tradable shares.
They are mathematical indicators calculated from prices that show strength or weakness from a different perspective than prices themselves. Trend-following indicators move in trends, have no bounds, and are not used in sideways markets. They always lag prices, and their signals are important and confirm price movements.
Money acquired through illegal means: drugs, theft, or other sources, but appears to be legitimately earned after being injected into banks
These are mathematical indicators calculated from prices that show potential, not clearly visible strength or weakness in price movement. These indicators may move in trends or fluctuate (moving around a central axis), and they can be used across all types of trends. Most of the time, their signals precede prices, but they can sometimes be misleading.
These involve exposure to legal claims that may result in losses due to legal demands.
The person or company that provides funds to borrowers in the hope of being repaid, usually with interest. Borrowers incur debt in the form of loans, and in the event of liquidation, lenders are repaid before shareholders receive their shares.
Present obligations of an entity arising from past events, the settlement of which is expected to result in an outflow of economic resources. Liabilities are classified as current (due within 12 months) or non-current (due after 12 months).
A company in which each partner’s liability is limited to their share of the capital only.
A market characterized by a small number of buy orders and sell offers. This may apply to an entire specific class of futures contracts for securities or commodities, or it may refer to specific shares, whether listed on the stock exchange or not. Prices in such a market are volatile compared to highly liquid markets, as the limited number of buy and sell transactions can significantly impact prices. Therefore, large investors avoid these markets, fearing that their transactions could have a substantial effect on security prices.
To dissolve a company, sell its assets, and settle its liabilities, allocating the proceeds from assets to pay off outstanding debts and obligations. This involves converting assets or holdings into cash, such as through the sale of stocks, bonds, and other investments.
The ease with which securities can be bought and sold in the market. Highly liquid markets are referred to as ‘deep’.
These are company shares that have met the listing requirements of the financial market, which all companies must adhere to as a fundamental condition for their listing.
Listing securities on the market, whether on the Main Market or the Parallel Market, or – where the context permits – submitting an application to the market for their listing.
This suspension is carried out either by the regulatory authority, which is the listing authority, or at the request of the listed company. Accordingly, all trading on the share is halted and all orders are cancelled from the order book.
A loan is the provision of money to a beneficiary, with the condition that an equivalent amount is returned. This financial contract aims to facilitate, granting the recipient funds (often cash) for their use, provided they repay the identical amount without any increase, either immediately or after a specified period.
An investment company licensed to conduct banking activities under the regulations of the Kingdom.
An investment intended to be held for an extended period — typically more than one year — with the objective of achieving capital appreciation, income generation, or both over time.
The lowest price recorded for the security during a specific period.
This involves a person managing a security belonging to another person in situations requiring discretionary action, or operating investment funds.
This refers to a market that receives a large number of buy and sell orders in a way that ensures price stability for the securities traded in it, and in which prices do not change continuously merely because of the high volume of transactions, but because the number of orders above and below the current market price is also large.
It refers to the ability to sell or buy a certain quantity of an asset without affecting its market price.
The illegal practice of artificially inflating or deflating the price of a security through deceptive or abusive practices, such as wash trading, spreading false information, or coordinated buying and selling.
Market operational efficiency refers to the extent of transaction costs in the market and is typically measured by the spread (price difference) between the selling price and the buying price. The relationship between operational efficiency and the spread is inverse, where operational efficiency decreases as the spread increases and increases as it decreases.
Refers to the highest point a financial asset’s price reaches before it begins to decline. Identifying the market peak is crucial for investment timing, as it can signal the start of a correction phase or a price downturn.
Market pricing efficiency refers to the market’s ability to correctly price a security. The faster and more accurately a financial market prices securities, the higher its pricing efficiency. Markets are categorized based on their pricing efficiency into three levels: weak-form efficient markets, semi-strong form efficient markets, and strong-form efficient markets.
The total market value of a company’s shares.
It refers to rapid and unpredictable changes in the prices of financial assets over short periods. Volatility reflects the level of market risk; the higher it is, the greater the potential for both profit and loss, making it a crucial metric for investor decisions and portfolio management.
Market Witnessing Speculative Scenarios — Among the most renowned stock market bubbles is the South Sea Bubble of 1720, which led to the collapse of the London stock market and the bankruptcy of numerous investors.
The date on which a financial instrument (such as a bond, sukuk, or certificate of deposit) expires and the principal amount becomes due and payable to the holder.
The specified date on which the amount due must be paid, whether it is a loan, bond, or invoice. It is used to manage cash flows and assess creditworthiness.
A corporate transaction in which two or more independent companies combine to form a single new entity, or one company absorbs another. Unlike an acquisition, a merger typically implies a mutual agreement between parties.
Mergers and acquisitions are two financial processes aimed at consolidating two companies into a single entity or one company purchasing another. These processes are used to achieve growth, increase market share, or improve operational efficiency, and are subject to precise legal and financial procedures.
This information covers economic and financial aspects pertaining to a specific company, and its impact is typically confined to the sector or company itself. Examples of this type of information include news about a merger between two companies, a company introducing a new product or technology, and similar instances.
An economic system combining elements of both market-driven (private sector) and centrally planned (government-controlled) economies, in which both the state and private entities participate in economic activity.
The process by which the central bank sets short-term interest rates to manage domestic demand and achieve price stability in the economic system.
It is the market in which short-term securities are traded, and the banking system generally undertakes these transactions. The most important institutions in this market are central banks, commercial banks, and exchange houses.
An investment fund whose sole objective is to invest in short-term securities and money market transactions.
Funds that invest in several types of assets, such as stocks, bonds, sukuk, money market transactions, and units of other investment funds.
A sales contract whereby the institution sells an item at cost plus an agreed-upon profit margin to the client, and the murabaha contract may be preceded by a promise from the client to purchase.
The total debt incurred by the government from loans used to finance successive budget deficits, particularly through the issuance of government-guaranteed securities.
In the “Merger and Acquisition Regulations,” it means any public offer, excluding offers made by the target company itself, subject to the provisions of the “Merger and Acquisition Regulations,” and submitted to all holders of shares with voting rights in the target company, for either of the following two purposes:
A company whose shares are listed on the market in respect of which an offer is made, or whose shares are the subject of a private sale and purchase transaction. The term “potential offeree company” shall be construed accordingly.
In the Securities Offering and Continuing Obligations Rules, it refers to a person who makes an offer, or invites a person to make an offer which, if accepted, leads to the issuance or sale of securities, either by him or by another person with whom arrangements have been made for the issuance or sale of securities. In the Mergers and Acquisitions Regulations, it refers to any person who makes or intends to make an acquisition offer subject to the Mergers and Acquisitions Regulations.
As defined in the “Rules for the Offer of Securities and Continuing Obligations,” a person who makes an offer or invites a person to make an offer that results in—if accepted—the issuance or sale of securities by arrangements for the issuance or sale of securities. This term is defined in the “Merger and Acquisition Regulations” as any person who makes—or intends to make—a takeover offer subject to the provisions of the “Merger and Acquisition Regulations”.
An economy that engages freely in international trade and investment with other countries, with minimal restrictions on the flow of goods, services, and capital across borders.
A trading system utilized by certain derivatives exchanges, where auction participants stand on the exchange floor and openly call out the financial transactions they intend to execute.
An investment fund whose units increase and decrease, and in which the investor may redeem their investment at any time in accordance with the fund’s policy.
A system in which money is pooled from investors and the pooled funds are invested together on their behalf in an open-end fund.
A term used to describe open-ended investment funds (OEIC).
A collective investment vehicle similar to open-ended unit trusts. It is sometimes described as an investment company with variable capital (ICVC).
A collective investment vehicle similar to open-ended unit trusts. It is sometimes described as an investment company with variable capital (ICVC).
It represents the extent to which a company relies on fixed costs in its operations. The greater a company’s reliance on fixed costs, the higher its operating leverage is considered to be, and consequently, the greater its operational risks.
These include human error, incorrect processes, business interruption, and information technology security (cyber risks).
Operational risks – the risk of loss due to typographical errors, weak institutional performance, or due to delays, fraud, the unavailability of the system used, or those arising from the performance of financial and information service providers, or other similar events
A derivative contract that grants the buyer the right, but not the obligation, to buy or sell an asset.
A market where buyers and sellers are matched according to a strict time priority based on price and the quantity of shares being traded, and does not require market makers.
An organized market for trading securities, overseen by an authority responsible for ensuring compliance with the exchange’s regulations. The New York Stock Exchange is a prime example of an organized market, where all traders gather in one place to buy and sell securities. Trades are typically executed by an exchange member on behalf of investors, and exchange authorities may halt trading in certain cases to restore balance to the market.
Trading operations conducted outside the stock exchange through multiple communication networks that connect brokers and dealers on one hand and investors on the other. The over-the-counter market does not have a mechanism to halt sharp rises or falls in securities prices or restore market balance. The most famous over-the-counter market in the world is NASDAQ.
A stock price is considered overvalued if it exceeds its fair value. One of the criteria used to gauge the degree of overvaluation is the stock’s price-to-earnings ratio (E/P). When this ratio is clearly higher than its average for the overall market, other markets, or the sector in which the company operates, the stock is overvalued.
The portion of subscribed capital that has been paid by subscribers.
The amount of the bond that will be paid at maturity; also known as the bond’s principal value.
This is the value stated on the security at issuance, whether common shares, preferred shares, or bonds. The par value of a security does not mean the amount paid by subscribers when the security is offered for subscription, as the security may be issued at a premium (issue premium) or, in some cases, at a discount (below par value).
The market where shares registered and offered under Chapter Eight of the Offering of Securities Regulations and Continuing Obligations are traded.
An offer (excluding offers made by the offeree company itself) subject to the Merger and Acquisition Regulations, made to all holders of voting shares in the offeree company for the purpose of acquiring a stake in the voting shares of the offeree company.
An investment method used in securities markets believed to be price-efficient.
It refers to the change in a security’s price between two time periods, and it is calculated as follows: (price change between the two periods / base period price × 100).
A bond with no fixed maturity date that pays interest indefinitely. Perpetual bonds are treated as equity-like instruments due to their indefinite duration.
Any form of security recognized under the laws of the Kingdom that can be executed on a financial instrument.
These are government actions other than regulations and laws.
Reallocation means making changes to the investment portfolio composition, either by adding new investments that align with the investor’s objectives, or by changing the portfolio’s investments due to changes in the investor’s objectives, risk level, or available time horizon.
A court-ordered legal measure to temporarily freeze or restrict the transfer of assets belonging to a defendant or debtor, pending the resolution of a legal dispute or judgment.
When a new offering is issued, existing subscribing shareholders are granted the right to purchase all the new shares that weren’t sold in the initial offering, in proportion to each shareholder’s stake in the company.
Shares that are entitled to fixed dividends and do not grant their holders voting rights. However, they provide priority in receiving entitlements over common shareholders in the event of the company’s financial distress or bankruptcy.
A class of shares that grants its holder a set of rights not enjoyed by common stockholders, including priority for preferred stockholders to receive a predetermined percentage of company profits and priority over common stock in receiving their rights upon company liquidation.
The price of the last trade executed on the security during the last day of the previous period.
The difference in the price of a security between two time periods. For example: the price change of a company’s stock during a trading day equals the difference between its closing price and opening price.
A term describing a sustained short-term decline in the securities market that occurs after a period of significant increases in stock prices.
A trading or investment strategy that profits from the difference in prices of related securities, assets, or contracts across different markets, time periods, or instruments.
Price stability is the stability of prices for goods and services in the market over a period, without sharp fluctuations. It serves as an indicator of economic stability and is a primary objective of monetary policies pursued by central banks to curb inflation and deflation.
The difference between the bid price and the ask price for a security at a specific time.
The market in which newly issued securities are sold for the first time to investors, with proceeds going directly to the issuing entity. IPOs and new bond issuances take place in the primary market.
Markets where securities are offered for the first time, such as initial public offerings, and are used to raise capital for investors.
A term commonly used in the United States referring to the interest rate at which banks lend to their most creditworthy major clients. The same practice applies in the United Kingdom, with only a difference in terminology, as it is considered a special interest rate for prime clients.
An investment fund established in the Kingdom that is not a public fund, and whose units may be offered to investors in the Kingdom in accordance with the provisions set out in Chapter Five of the Investment Funds Regulations.
The sale of securities directly to a limited number of selected sophisticated or institutional investors, without a public offering. Private placements are subject to fewer regulatory requirements than public offerings but restrict the resale of securities.
A transaction involving the purchase and sale of shares of companies (with voting rights) whose shares are listed on the market, negotiated between the offeror and the selling shareholder in the offeree company on a private basis, without making an offer to or involving the other shareholders of the offeree company.
The transfer of ownership, management, or control of a state-owned enterprise to private sector entities, typically through a public offering of shares or a strategic sale. In Saudi Arabia, privatisation is a key element of Vision 2030’s economic diversification agenda.
The amount set aside from the total mudarabah profits to maintain a certain level of return on investment for the mudarib and unrestricted investment account holders.
The amount set aside from the total mudarabah profits to maintain a certain level of return on investment for the mudarib and unrestricted investment account holders.
The ability of an organization to generate profits from its activities, measured through indicators such as profit margin and net income.
These are company stocks whose profits have declined significantly, but are expected to recover in the future. These stocks are classified as potential investment opportunities, as investors believe the company’s performance decline is temporary and may be due to general economic conditions or operational challenges that can be resolved. Such companies often have strong financial fundamentals or a long-term competitive advantage, which increases the likelihood of recovery and future profit growth.
An investment fund established in the Kingdom whose units may be offered by the fund manager to investors in the Kingdom in accordance with the provisions of Chapter Four of the Investment Funds Regulations, through any method other than a private offering.
The offer of securities to the general investing public, subject to a full regulatory process including the registration and approval of a prospectus. See also: IPO.
Represents the terms of a finance lease contract, whereby the lessee has the right to purchase the leased equipment at the end of the lease term, either for a specified amount or at fair market value.
An option contract that grants the buyer the right to sell an asset.
A statement by an external auditor expressing reservations about specific aspects of a company’s financial statements, without issuing an adverse opinion. A qualified opinion indicates that except for certain identified matters, the financial statements present a true and fair view.
Foreign institutions and individuals who meet specific eligibility criteria established by the Saudi Capital Market Authority (CMA) to directly invest in the Saudi Stock Exchange (Tadawul). QFI status enables access to the Saudi market under specific ownership and regulatory conditions.
A share of common stock owned by a person that qualifies them to serve as a director in the company that issued the shares
The application of mathematical and statistical models, algorithms, and computational methods to evaluate financial instruments, portfolios, and markets.
Specific restrictions imposed by supervisory authorities on investments in high-risk asset classes
The fiscal year is divided into four quarters, each lasting three months. Regulatory bodies require all companies to issue quarterly financial reports disclosing their financial results for that quarter.
A trading system utilized by securities firms that set and quote bid and ask prices.
An independent organisation authorised to assess and publish credit ratings for issuers of debt securities, sovereign governments, and financial instruments, reflecting their creditworthiness and capacity to meet financial obligations.
Publicly offered real estate investment funds whose units are traded on the Saudi financial market. Their investment objective is to invest in developed real estate that can generate periodic rental income. They distribute a specified percentage of the fund’s net profits in cash to the unit holders in this fund throughout its term, on an annual basis, at a minimum.
An investment fund specialized in investing in commercial real estate.
An investment fund specialized in investing in commercial real estate.
The difference between the amount received from selling an asset and its book value. Realized gains or losses appear in the income statement and are also usually added when calculating taxable profit. In some cases, a loss is realized even if the sale has not occurred.
Revenue is realized when goods or services are exchanged for cash or claims to cash (accounts receivable). This means that the entity recognizes revenue at the moment a sale is completed or a service is rendered, whether payment is received in cash immediately or recorded as an account receivable (i.e., an amount due from the customer at a later date). This concept is one of the fundamental principles in accounting.
The day on which a shareholder must own a company’s shares to be eligible to receive dividend distributions.
The repayment of a bond, sukuk, or other debt instrument at its maturity date, or the repurchase of fund units by the fund manager from investors. Redemption may also refer to the early recall of a callable bond at the issuer’s option.
Registrar Adjustments – A type of operation performed by the registrar to adjust the share balance in the system as a result of any material corporate events
These are regulations that impose costs or restrict activities.
Calculated by dividing the company’s total market capitalization by the total market capitalization of all listed companies, multiplied by one hundred.
The performance of a security, fund, or portfolio compared to a benchmark index or peer group over a specified period, used to assess whether an investment strategy or manager has added value.
An agreement to transfer a financial asset to a second party in exchange for cash or other consideration, with a mutual commitment to repurchase the financial asset at a future date for an amount equal to the cash or other consideration exchanged, plus interest.
A document prepared by a financial analyst as part of an investment research team at brokerage firms or investment banks. A research report typically focuses on a stock or a group of stocks within a particular sector or industry, or on a currency, a commodity, or a fixed-income instrument.
Amounts deducted from profits/net income to cover contingent liabilities or legal requirements, forming part of shareholders’ equity or surplus
These are price levels that are difficult to break above, and their breach indicates a market recovery.
Accounts whose holders authorize the investment of their funds based on mudarabah or agency contracts, with specific restrictions on where, how, and for what purpose these funds must be invested
Some companies issue securities with restrictions, such as limiting subscriptions exclusively to existing shareholders (e.g., during the capitalization of reserves), or restricting subscriptions to small shareholders, or imposing a maximum limit on the quantity of shares or bonds a shareholder may subscribe to.
Retained earnings are profits that a company reinvests instead of distributing them as dividends to shareholders. Retained earnings appear on the company’s balance sheet under the shareholders’ equity section and may sometimes be referred to as accumulated surplus.
Refers to the percentage of net profits not paid out as dividends, but retained by the company to reinvest in its core business or to pay off debt. It is recorded under shareholders’ equity in the balance sheet, and the retained earnings formula is calculated by adding net income to or subtracting from retained earnings and deducting any dividend distributions to shareholders.
An agreement whereby a takaful company cedes some of its risks under a mandatory or optional retakaful agreement as a representative of the participants under the takaful contract, by contributing part of the premiums as a donation to a common fund against certain risks or damages
A takaful company whose participants are primary takaful companies and that is subject to the provisions of the takaful company itself. This company acts as the reinsurer, assuming part of the risks covered by the original takaful companies in return for a share of the contributions. This model aims to distribute risk and enhance financial stability in the takaful sector, while adhering to the same Sharia principles governing takaful companies, such as sharing in profits and losses.
They are a primary means for individuals to secure funding for their post-retirement needs. A variety of retirement programs are available, ranging from those offered by companies to their employees to personal plans.
The income generated from a specific investment, represented as a percentage of the current price.
Measures the return generated from the use of the company’s total assets, calculated by dividing net income by total assets.
This ratio measures the rate of return on shareholders’ investments represented by equity, and is calculated by dividing net profit (net income) by total equity.
It is an amount expressed as a percentage, earned as a result of investing in a company’s common stock for a specific period. It is used as an indicator of the company’s efficiency in using shareholders’ equity to generate profits. It is calculated by dividing net profit after tax by total equity. The higher the ratio, the stronger the financial performance.
An amount expressed as a percentage earned from investing the company’s entire capital (common and preferred shares plus its long-term funded debt)
Return on investment in securities is divided into income return and capital return. Capital return is calculated by dividing the profits realized from selling the security by the amount of funds invested, while income return on a security is the return that the investor earns in the form of distributed dividends (stocks) or interest received (bonds).
The total income generated by a company from its principal business activities — such as sales of products or provision of services — before deducting any costs or expenses. It is the top line of the income statement.
A transaction in which a private company acquires a publicly listed company — or gains control of it — as a means of becoming listed on a stock exchange without conducting a traditional IPO.
A transaction in which a private company acquires a publicly listed company — or gains control of it — as a means of becoming listed on a stock exchange without conducting a traditional IPO.
Issuing new ordinary shares and offering them to existing shareholders in proportion to their ownership of the company’s shares, at a price that is usually much lower than the prevailing market price.
Risk is defined as the fluctuation in returns and profits, which may include losses. Investments carry varying degrees of risk, and generally, the higher the levels of risk, the greater the potential for higher returns. An individual’s risk tolerance determines the level of risk they are willing to undertake, considering their investment objectives and the planned investment horizon.
These ratios determine the risk level of a specific financial asset or liability. They are frequently applied in the banking sector to ascertain the capital an institution must hold against such assets or liabilities.
Compensation to the franchisor in the form of a percentage of profits or share in products. Royalty is one of the essential elements in franchise contracts or licensing agreements, where the franchisor receives periodic financial compensation from the other party using the franchise
An Islamic finance contract in which the full payment for goods is made in advance (at a discounted price) and the goods are delivered at a specified future date. It is used primarily for agricultural commodities.
A classic price pattern that signals a trend reversal. It indicates a gradual shift in the supply-and-demand balance, with price action moving from a mild decline to sideways movement, then a gradual rise, and finally a sharp rise. It typically takes a long time to form and illustrates the accumulation phase described in Dow Theory. Trading volumes take the same saucer shape at the bottom and then rise sharply at the start of the new trend.
It is a Saudi joint-stock company established in accordance with the provisions and regulations of the Capital Market Law and the Companies Law. Tadawul’s Board of Directors consists of nine members appointed by a decision of the Council of Ministers. The Board includes a representative of the Ministry of Finance, a representative of the Ministry of Commerce and Industry, a representative of the Saudi Arabian Monetary Agency, four representatives of licensed brokerage firms, and two representatives of listed joint-stock companies. The Company’s objectives include providing, preparing, and managing securities trading mechanisms; carrying out settlement and clearing operations for securities; depositing securities, registering their ownership, and publishing information related to them. It may also conduct any other activity related to any of the foregoing in accordance with the Capital Market Law and in a manner that achieves its objectives set out therein.
The market where previously issued securities are traded.
These are markets where securities are traded post-issuance, such as the stock market, enabling investors to buy and sell securities.
A sector refers to a group of companies operating in the same field or activity. A company’s stock performance is typically measured against the sector’s overall average performance, in order to compare the stock’s performance with similar stocks in the same sector.
Bonds backed (guaranteed) by collateral (pledges, liens, or mortgages)
A common practice in foreign market exchanges, carried out by market makers to create a shortage in the supply of those securities on the exchanges in return for expenses and fees.
Rating processes conducted for the credit risk and investment risk of securities issued for the first time, by specialized commercial agencies
Securities, particularly stocks and bonds issued by businesses, are the primary product traded in capital markets. A security represents an instrument that grants its holder the right to a predetermined portion of the return in the case of bonds and preferred stocks, or participation in the total return achieved by the company in the case of common stocks.
Which must comply with international identification specifications such as the International Securities Identification Number (ISIN) or the Committee on Uniform Securities Identification Procedures (CUSIP)
The use of a company’s own internally generated funds — such as retained earnings or cash flow from operations — to finance investment and growth, without resorting to external debt or equity.
Markets in which prices fully reflect all publicly available information. Under the Semi-Strong Form of the EMH, fundamental analysis cannot consistently generate abnormal returns.
The final process in a securities transaction in which the seller transfers the securities to the buyer and the buyer transfers the agreed payment to the seller, completing the trade. In Saudi Arabia, settlement typically occurs on a T+2 basis.
A right that entitles its holder to purchase new shares of the same class. Subscription rights are usually issued to existing shareholders on a pro rata basis, so that their ownership stake remains unchanged.
A natural or legal person who owns shares issued by a joint-stock company.
Means, for the purpose of the Securities Offering Rules and Continuing Obligations, the document required in certain cases for the amendment of the issuer’s capital, in order to enable shareholders to vote at the relevant General Assembly on an informed basis.
Another name for shares; the investors’ (shareholders’) stake in the company’s assets (i.e., assets minus liabilities).
An official record documenting the ownership of shares in a joint-stock company, the transfer of their ownership, and any transactions involving them. It typically includes shareholders’ names, addresses, and the number of shares each holds.
Net assets resulting from deducting total liabilities from total assets. Shareholders’ equity includes paid-in capital, retained earnings, and all reserves established by the joint-stock company.
Practical Sharia rulings derived from Sharia sources (the Quran, Sunnah, Ijma, and Qiyas), and other approved Sharia sources.
The practice of borrowing securities and selling them in the expectation that their price will fall, enabling the short seller to buy them back at a lower price and return them to the lender, profiting from the price decline.
It is a balance between buying power and selling power, where there is a resistance zone that prices cannot break through upward and a support zone that prices cannot break through downward.
It refers to any investment that pertains to societal well-being, such as those directed towards sports, cultural, and recreational activities.
An institution’s ability to meet its financial obligations on time, and an indicator of the strength of its financial position.
Stocks of companies that typically offer the potential for high and exceptional capital gains. Investing in this type of stock involves significant risk.
A corporate restructuring in which a subsidiary, division, or business unit of a company is separated and established as an independent entity, with shares distributed to existing shareholders of the parent company.
The person responsible for sponsoring the special purpose entity in accordance with the provisions of the rules governing special purpose entities.
The spot market refers to the market in which the securities traded are delivered and received, or the transaction is settled, on the same day or within a short period (business days) determined by the authority supervising securities trading.
The difference between the bid (buy) price and the ask (sell) price.
The majority’s right to squeeze out the minority — also known as the withdrawal offer or a mandatory buyout offer from the controlling party to force out minority shareholders. This right is typically exercised when a particular party (or a related group) reaches a high ownership stake in the company’s shares, such as 90% or more, giving them the legal authority to compel the purchase of the remaining minority shares.
A financing arrangement in which capital is provided in multiple instalments or tranches, tied to the achievement of agreed milestones rather than being disbursed all at once.
Any person who has an interest in the company, such as employees, creditors, suppliers, customers, agents, and service providers to companies
A legally required reserve that companies in Saudi Arabia must maintain, typically by retaining a defined percentage (commonly 10%) of annual net profit until the reserve reaches a specified level of share capital.
The practice of buying shares in one market and selling them simultaneously, or in another market, to capitalize on price differences. Arbitrage occurs when a stock’s price differs between two distinct markets. An investor capitalizes on this by purchasing the stock from the cheaper market and immediately selling it in the more expensive market, thereby securing an instant profit with minimal risk.
A certificate issued by a company indicating the name, whether the printed name is that of the registered owner or the certificate holder is the owner
It represents the price of the last transaction executed on the stock during the daily trading session.
Dividends distributed by a company to its shareholders in the form of shares instead of cash, also known as bonus shares.
A certificate granting the holder the right to purchase a specific number of shares at a predetermined price within a specified period. This option does not imply immediate ownership of the shares but rather confers the right to acquire them later. It is frequently utilized as an incentive for employees or investors.
A process that increases the number of shares comprising a company’s capital without increasing shareholders’ equity, as both the par value and market value per share decrease by the approved split ratio. For example, if the par value per share is SAR 50, the market value per share is SAR 500, and the number of issued shares is 100,000,000, and a 5-for-1 stock split is approved, the post-split situation becomes as follows: the par value per share is SAR 10, the market value per share is SAR 100, and the number of shares is 500,000,000.
A stock is undervalued when it trades at a price lower than its true value as suggested by standard valuation fundamentals such as the company’s strong earnings or reputation. This may sometimes occur when traders turn away from a company’s stock for one reason or a combination of reasons.
A share represents an ownership stake in a company’s capital, and its holder receives a share of the company’s profits. It can be said that stocks are ownership stakes of equal value, indivisible, and tradable through commercial means.
For the purposes of the Investment Funds Regulations, this refers to the preparation of stress testing models and methods for analyzing hypothetical scenarios of the risks faced by the fund, the fund manager’s policy for dealing with them, and sensitivity analysis to measure the level of volatility in the prices of investment fund units in response to the variables that affect them. This includes, for example but not limited to, the fund manager conducting a hypothetical simulation of liquidity risks and the policy it will follow to address those risks, and the results of this hypothetical simulation, in order to assess the policy it follows in this regard and identify ways to develop it.
For the purposes of the Investment Funds Regulations, this refers to the preparation of stress testing models and methods for analyzing hypothetical scenarios of the risks faced by the fund, the fund manager’s policy for dealing with them, and sensitivity analysis to measure the level of volatility in the prices of investment fund units in response to the variables that affect them. This includes, for example but not limited to, the fund manager conducting a hypothetical simulation of liquidity risks and the policy it will follow to address those risks, and the results of this hypothetical simulation, in order to assess the policy it follows in this regard and identify ways to develop it.
Structural market efficiency refers to the number of market participants. If the number of participants in the market increases, and no single participant or group of them can influence market prices, this indicates a competitive market and an enhanced degree of structural efficiency.
A company is considered a subsidiary when a person owns more than 50% of its capital or has effective control over it.
Documents representing ownership of an undivided share in tangible assets, or a mixed pool of tangible and other assets, which may be assets in a specific project or a particular investment activity, in accordance with Sharia provisions.
The process of issuing sukuk or investment certificates representing an undivided ownership interest in specific assets, which may be issued by an owning entity that sells them to sukuk holders, or by a trustee entity represented by a special purpose vehicle.
A financial derivative traded over the counter (OTC) under which two parties exchange a series of periodic payments based on the notional value of the underlying asset over an agreed period. Swap contracts may include interest rate, currency, and equity swaps.
The abbreviation of the name of the listed public joint-stock company, approved by the trading regulator.
Risks arising from an institution’s inability to meet its obligations upon maturity, which consequently leads to the inability of that institution or other entities to fulfill their commitments, thereby causing a chain of adverse reactions and impacts on the market and transactions.
In Takaful (Islamic insurance), the process by which participants (policyholders) contribute funds into a shared pool (Tabarru’ fund) to cover potential losses of any participant. The underwriting process assesses risk and determines contribution amounts.
Unregistered securities not traded on an official stock exchange, with transactions conducted via phone or electronic communication networks directly connecting stock and bond traders, bypassing the exchange.
The target price is the price expected by an analyst (or valuer) for a security. It’s the price against which an investor gauges the best available investment opportunities.
A method of forecasting the future price movements of securities by analysing historical market data — primarily price and trading volume — to identify trends and patterns using charts and statistical indicators.
It is the monetary value at which a good or service is exchanged between two parties. Price is used as a means of determining the value of products in financial and commercial markets, and it reflects supply and demand. In economic contexts, price is considered an important tool for analyzing marketing efficiency and determining institutions’ pricing policies.
It is a virtual mind formed by the combined minds of the public, united by a single goal: making profits. It thinks only about profits, so its thinking is irrational—driven solely by greed to make more profits or by fear of losing those profits.
The Financial Sector Development Program is one of 13 executive programs launched by the Council of Economic and Development Affairs to achieve the Kingdom’s Vision 2030. Through this Vision, the Kingdom seeks to advance the financial sector, making it a diverse and effective sector to support national economic development and stimulate savings and investment.
A set of financial assets owned by the investor, such as stocks and bonds, managed to achieve specific financial goals.
It is the price at which the security is traded in the securities market at a specific point in time.
It’s the opportunity given to a company’s existing shareholders to subscribe to additional shares in a new offering, in proportion to their current ownership, with the aim of preserving their rights from the dilution caused by the capital increase. This right is often granted at a discounted price below the market price to encourage participation.
The annual return on an investment, which includes its value appreciation and stock dividends or interest. For bonds held until maturity, the total return is the yield to maturity. For stocks, the increase in their value is estimated using the Price/Earnings (P/E) ratio. In options trading, total return means stock dividends plus capital gains, in addition to income from a put and/or call option.
For the purposes of the Investment Funds Regulations and the Real Estate Investment Funds Regulations, this refers to the value of the Fund’s assets, which is valued in accordance with the method for valuing the assets set out in the Fund’s terms and conditions.
An individual who buys and sells securities for their own account.
The buying and selling of financial securities (such as shares, bonds, sukuk, and derivatives) on organised exchanges or over-the-counter markets.
This is the cost (commission) incurred by market participants when buy and sell orders are executed.
Securities traded in the stock market that are purchased and held for the purpose of resale in the short term.
Trading volumes refer to the total number of shares or contracts traded during a session. They serve as a supportive tool for price analysis, given that price movement is paramount in technical analysis, and trading volumes are key indicators that confirm price action.
Transparency largely depends on the availability and accessibility of accurate, material information without delay, postponement, or omission—most importantly, information on price and quantity—in a way that ensures the integrity of transactions and the market. The Securities and Commodities Authority has worked to deepen a culture of transparency through a legislative infrastructure framework, making transparency mandatory in all transactions.
A debt security issued by the United States government that carries an interest coupon with a maturity of one year or less from the issue date.
Short-term government securities issued by the state and sold at a discount in weekly auctions by the Ministry of Finance, as they do not bear an interest rate.
Debt securities issued by the United States government, characterized by their long-term maturity of 10 years or more and issued in denominations starting at $1,000. Debt securities are issued by companies and then repurchased by the same companies, and these securities are considered retired or redeemed upon repurchase.
Shares that the issuing company repurchases through the market under certain controls. The company may hold these shares, reissue them, or cancel them. It is worth noting that these shares are not considered part of the company’s capital and are not entitled to distributed dividends.
A classic trend-reversal pattern that appears after an uptrend. The pattern forms when a strong upward move continues the previous uptrend, followed by a decline. Prices then rise from the previous low area twice without breaking below it, and reach approximately the same previous peak twice as well without breaking above it, until a strong decline occurs and breaks below the low area on the third time.
A company usually affiliated with a commercial bank that acts as a trustee for individuals or entities to manage funds or real estate, or custodial arrangements, transfer and registration of shares, and other similar services. Trust companies also manage trust investments and estate planning, and are regulated by state laws.
Assets such as real estate and securities held in trust and managed by trustees.
A person legally entrusted with the safekeeping and prudent management of trust assets to fulfill the trust’s objectives, such as a receiver or a trustee in bankruptcy appointed by the court or creditors to manage the affairs of a bankrupt company or individual.
The financial result of the participants’ risk fund at a takaful company or a retakaful company is one of its business components. It represents the balance after deducting expenses and claims (including any movement in the value of outstanding claims provisions) from contribution revenues, in addition to investment returns (income and profits on investment assets).
These are shares for which the issuing company has not applied for listing on the financial market, or which have not met the financial market’s listing requirements.
The change in the value of an asset still held by its owner, which differs from a realized gain or loss resulting from the sale of an asset. The term typically refers to a decline in an investment portfolio resulting from applying cost or market value, whichever is lower, on an aggregate basis.
Accounts whose owners authorize the investment of their funds based on mudarabah contracts without imposing any restrictions. The mudarib may commingle their own funds with them and invest them all in a pooled portfolio.
The analytical process of determining the present or fair value of an asset, security, company, or financial instrument, using methodologies appropriate to the asset type and purpose of the valuation.
A reserve or provision created by charging a specific expense account; therefore, it is deducted from profits to hedge against changes in the value of the company’s assets.
It is a reserve or provision created by charging a specific expense account; therefore, it is deducted from profits to hedge against changes that occur in the value of the company’s assets.
A statistical measure of the dispersion of returns for a security or market index, typically expressed as the standard deviation of price changes over a given period. High volatility indicates large and rapid price fluctuations.
It is the right granted to the shareholder to vote on the company’s policies and decisions at the General Assembly meeting, in proportion to the number of shares held.
All voting rights associated with the company’s shares that can be exercised at a general assembly of the company.
A share whose holder is entitled to vote for electing the company’s board of directors, for the issuance of a new group of shares, and on any other significant key decisions of the company, at the annual ordinary general meeting of shareholders.
In weak-form efficient markets, the prevailing prices of securities at any given moment reflect traders’ knowledge of the security’s past prices and trading volume.
In a hostile takeover context, a white knight is a friendly third party that rescues a target company from an unwanted acquirer by making a competing, more favourable offer. More broadly, a strategic ally or partner.
Funds invested as cash in a company, representing the excess of current assets over current liabilities. Also known as net current assets.
Bonds issued at a discount to their face value that do not pay interest but are redeemed at face value on a predetermined future date
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