Equities FAQ
Equities are shares in a company that are owned by people who have a right to vote at the company's meetings and to receive part of the company's profits after the holders of preference shares have been paid.
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Charges
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About Equities
What is the total commission charged when equities are bought and sold?
Trading costs:
- Buying = 1.1325% of consideration amount
- Selling = 1.4775% of consideration amount
- CSCS alert fee+VAT of 4.30 is also applicable per trade clip
What are factors affecting the performance of stocks?
Some of the factors determining stock performance include:
- Company-related developments – Examples include new product launches, acquisition of major contracts, performance of the company with respect to competitors, changes in management team or substantial shareholders etc.
- Sector-specific factors – Examples include retail sales, commodity prices, government measures etc.
- Market factors – Examples include domestic and global economic outlooks, inflationary pressures and actions by central banks etc.
What are the risks to consider?
- Price Risk – Stock prices can fall below your purchase price due to macroeconomic or sector/company-specific factors.
- Volatility Risk – Refers to the fluctuation in the value of a stock due to the changes in its stock price.
- Liquidity Risk – Stock liquidity is the degree in which stocks can be bought or sold in the market without materially impacting its market price. Liquidity risk refers to the risk where a stock cannot be transacted in a timely manner.
What are the benefits of investing in shares/stock?
- A stock is a type of security which represents a fractional ownership of a company in proportion to the total number of shares. Investing in stocks allows an investor to participate in the growth of a company.
- Liquidity – A stock is typically seen as a liquid asset, as it trades publicly with price transparency on a stock exchange, allowing investors to buy/sell shares.
- Capital Gain – The other source of return on investment apart from dividend is the capital gains.
- Gains which arise due to rise in market price of the share.
- Entitlement to corporate action – dividends, share bonuses, rights etc
What are shares?
- A share/stock represents ownership of a company, as well as a claim on the company’s assets and earnings. A shareholder of a public company may enjoy dividends from the company’s profits, participates in its share price performance, and has the right to vote at its shareholder meetings.
- Shares/stocks may be bought or sold, usually but not always, in the context of a securities exchange, and the exchange lists companies across different sectors