shares at Stock Research

The American corporation Mills Corp., engaged construction and management of large shopping centers in the USA, Canada and the Europe, sells the shares in three shopping centers for 981 million dollars, it is spoken in the press release of the company published today.
As the buyer acts Ivanhoe Cambridge Inc. According to the signed contract, Ivanhoe Cambridge will receive shares of Mills in three shopping centers - Vaughan Mills in Ontario (Canada), St. Enoch Centre in Glasgow (Great Britain) and Madrid Xanadu in Madrid (Spain).
Mills expects to receive net profit from the transaction at a rate of 500 million dollars. The received financial assets will go on payment of a duty of the company.

I have written this blog for 1.5 month, but only several days ago I realize that I wrote about different foreign stock exchanges, but I’ve forgotten to write about the unique stock of my own country… About Belarusian Currency and Stock Exchange… And today I’ll try to correct it!
The portrait of open joint-stock company “Belarus currency-stock exchange”
The open joint-stock company “Belarus currency-stock exchange” has been formed in 1998 in accordance with the Decree of the President of Belarus from July, 20th, 1998 №366 “About perfection of system of state regulation of the stock market”. Founders of a stock exchange became National bank of the Republic of Belarus (a control share holding), Fund of the state property of the Ministry of Economics of the Republic of Belarus and a number of large banks of the Republic of Belarus.
The supreme body of management of open joint-stock company “Belarus currency-stock exchange” is General meeting of shareholders. The structure of shareholders of a stock exchange, except for founders includes banks, the broker/dealer subsidiaries of republic, etc. The Management of a stock exchange between the General meetings of shareholders is carried out by the Supervisory council.
As of today of open joint-stock company “Belarus currency-stock exchange” is the unique in republic trading platform on the basis of which the national system of the exchange trades on all basic segments of the financial market is created: currency, share and term. Except for the organization of the trades, the stock exchange carries out functions of the settlement depositary institution in the exchange market of not state securities, function of the operator of settlement-clearing system by all kinds of securities and tools of the term market, and also carries out registration of the transactions concluded on the over-the-counter market with stocks of open joint-stock companies and voucher “Housing”.
The foreign exchange market.
According to the Rules of exchange trade in the foreign currencies approved by the decision of Board of National bank of the Republic of Belarus 28/06/2001 №165 (read with 31/10/2003), open joint-stock company “Belarus currency-stock exchange” it is allocated by the right of the organization of the trades by a foreign currency.
The trades by a foreign currency at a stock exchange are carried out within the limits of Section of the currency market. The exchange trades are spent daily with use of electronic system of the trades. The cores currencies quoted at a stock exchange are: US dollar, Euro, the Russian ruble and the Ukrainian hryvna. The rates generated on results of the exchange trades, today are included into the category of the basic indicators of the currency market. On results of the trades the National bank of the Republic of Belarus establishes official rates of the Belarus ruble in relation to US dollar and ruble of the Russian Federation.
The total volume of the trades by all kinds of currencies for 9 months of 2005 was made 10.6 billion of rubles or 4 912 million US dollars in an equivalent.
Stock market.
According to the legislation of the Republic of Belarus for many securities the stock exchange is a unique admissible jail of transactions. To such papers concern: the state issue securities, bonds of National bank of the Republic of Belarus, the bond of local loans and the securities of the open joint-stock companies last an estimation of quality and reliability (listing) and admitted to the reference at a stock exchange. To participation in the trades by securities members of Section of the share market are supposed only. Transactions with securities are made in universal electronic trading system. The opportunity to participate in the trades with use of the automated workplaces located in trading halls of a stock exchange, or through the removed trading terminals is given to members of Section of the share market. The trades by securities are spent daily in following modes: “Continuous double auction”, “REPO (the fixed pricing)”, “REPO (free pricing)”, “Discrete auction”, “Forward transactions”, “Simple auction”, “Simple auction REPO”. The given modes are effectively used for primary accommodation of securities, the organization of their secondary reference and maintenance of processes of privatization.
Now in sector of the state securities and securities of National bank auctions of the Ministry of Finance on accommodation of the state securities are spent, within the limits of the secondary reference transactions in modes “continuous double auction” and “REPO” are made, the National bank of the Republic of Belarus on a regular basis spends simple auctions REPO. On the given segment of the market the institute a market-makers functions. Since September, 1st, 2005 the index on the market government securities/short-term bonds of the National bank of the Republic of Belarus pays off and published.
In sector of not state securities transactions with stocks and bonds of subjects of managing are made at primary accommodation and the secondary reference, and also privatization transactions. The fund of the state property of the Ministry of Economics of the Republic of Belarus uses exchange technologies for the organization of auctions on sale of actions belonging to the state for a foreign currency and the Belarus rubles, “discrete auction” and other accessible modes of the trades realizes state blocks of shares of stocks in a mode. Since October, 7th of 2005 in sector of not state securities the regular trades by bonds of banks have begun.
Participants of the trades can make transactions with not state securities with following conditions of calculations: T+0 (delivery of money and securities in day of fulfillment of the transaction), T+n (delivery of money and securities in the day certain by participants during the moment of fulfillment of the transaction), and also the transactions made on conditions REPO.
The total volume of the exchange trades by securities of all kinds for 9 months of 2005 has made 7.0 billion of rubles, or 3.2 billion of US dollars.
According to the legislation of the Republic of Belarus the stock exchange carries out obligatory registration of all accomplished on the over-the-counter market of transactions with securities of the open joint-stock companies, and also since January, 25th, 2005 transactions with nominal privatization checks “Housing”. For nine months of 2005 by a stock exchange it has been registered 1066 over-the-counter transactions with stocks of open joint-stock company for a total sum of 15.96 billion rubles (7.4 million of US dollars) and 33653 transactions with  voucher “Housing” at actual cost of 19083,7 million rubles (on a face-value 24.0 million rubles). For service of processes of registration system BEQAS functioning on the basis of the Internet-technologies is used.
The term market.
Since October, 2004 the stock exchange has started trading by financial tools of the term market on a constant basis. The exchange trades by tools of the term market are spent in electronic trading system every working day simultaneously on all tools in a mode “continuous double auction”. As participants of the trades act the members of Section of the term market. Calculations under made transactions are spent in uniform settlement-clearing system, in which function of a clearing bank carries out National bank of the Republic of Belarus, and function of clearing - a stock exchange. The toolkit of the given market is presented by future contracts on rates of foreign currencies and interest rates in the market of the state securities.
Information work.
The major principle of the organization of activity of a stock exchange is development of information technologies and increase of a transparency of the financial market of republic. With a view of realization of the given principle by a stock exchange it is created and successfully functions three basic automated information products: the official Internet-site of a stock exchange, the Belarusian automated quoted system of a stock exchange (BEQAS), Information system “Stock market”. The official Internet-site of open joint-stock company “Belarus currency-stock exchange” is the central element of system of disclosing of the information by results of activity of a stock exchange in the currency, share and term markets.
“The Share market” accumulates data about a condition and the processes occurring on a republican securities market. The basic suppliers of the information are open joint-stock company “Belarus currency-stock exchange”, Committee under securities at Ministerial council, National bank, the Ministry of Economics and the Ministry of Finance. Except for the data, directly concerning the stock market, in system the information on a condition of the currency and monetary market is concentrated; contain actual financial and social and economic news of Belarus, the CIS countries and the world.
BEQAS is the information-quoted system functioning on the basis of the Internet-technologies, intended for search of the counterpart for fulfillment of transactions with various kinds of securities, and also serving processes of obligatory registration in the unorganized market of transactions with stocks of the open joint-stock companies and the nominal privatization checks “Housing” accomplished on the over-the-counter market. For today the system is the only thing in republic a high-grade source of the information on a condition the over-the-counter market of the Belarusian enterprises.
Besides the stock exchange acts as the supplier of the information for republican news agencies, and also the leading mass-media focused on illumination of world economic processes.

Yesterday when I read the news-block I thought why I couldn’t discuss the current news in my blog. So I’ve tried to find the most interesting news for investors.
Wienerberger Brick
The European Reconstruction and Development Bank have allocated Austrian Wienerberger 13.3 million euros for building and construction of brick-making plant in the Russian Federation.
 About it is spoken in the message of bank. The European Reconstruction and Development Bank has purchased 18.1 % of stocks of limited liability company “Wienerberger Brick” (Russia) for 2.5 million euros and has granted a loan in 10,8 million euros on payment of debts. The rest of means in construction (which total cost is estimated in 38 million euros) will put Wienerberger AG.
The factory will make nearby 120 million facing bricks per year or 220 million hollow bricks. The given project - a part of the joint program of the European Reconstruction and Development Bank and Wienerberger under investments into manufacture of building materials into the countries where the bank works.
The Austrian group company Wienerberger was based in the Vein in 1819. And now it is the world leader on manufacture of a hollow and facing ceramic bricks. The group company has more than 230 factories in 24 countries of the world.

Sadia
Company Sadia S.A., one of leading manufacturers of meat products and semi-prepared foods in Brazil, has proposed purchase of 50 % of stocks of Perdigao S.A for 1,7 billion dollars. Such data are resulted in the press release of the company published today. Cost of the transaction is estimated in 3.7 billion real (1.7 billion dollars). According to conditions of the offer, Sadia it is ready to pay 27.88 real (12.58 dollars) for each current stock Perdigao. Offered to Sadia price exceeds on 35 % cost of stock Perdigao on results of closing of the share trades in the San Paulo Stock Exchange. Term of the offer expires on October, 24th 2006. As it is marked in press release of Sadia, as a result of merge in the international market of meat products and semi-prepared foods there will be a new leader. Net profit Sadia on results of 2005 has been 656.12 million Brazilian real (307.88 million dollars).

Wimm–Bill–Dann
Shareholders of public corporation “Wimm–Bill–Dann Food stuffs” (WBD) at extraordinary meeting will consider the problem on expulsion of Jamshid Jadegardzham from structure of board. As they say in message WBD, it is offered to shareholders to consider the given question under the recommendation of chairman of board of the company of Toni Mahera. Only those shareholders have the right to take part in assembly, who was registered artificially of July, 2006. The Date of ending of reception of bulletins for voting is September, 1st 2006. Also it is offered to shareholders to approve creation of branches “Wimm–Bill–Dann” in Samara, Tuimazy, Novosibirsk, Rubtsovsk, Krasnoyarsk, Irkutsk.
Ownership capital of WBD is 880 millions of rubles. In circulation there is 44 million ordinary stocks (face value 20 rubles). The principle shareholders of the company as of end of 1st quarter of 2006 are Gabriel Jushvaev - 17,13 %, Sergey Plastinin - 9,30 %, David Jakobashvili - 8,33 %, Michael Dubinin - 5,71 %, in nominal holding of shares at Deutsche Bank Trust Company Americas is 39,99 % of stocks of the company.
Public corporation “Wimm–Bill–Dann Food stuffs” was created in 1992. And now it is engaged in manufacture of juices and dairy products in Russia. Into the company enter 30 industrial enterprises which are being 21 regions of Russian Federation and the CIS. “Wimm–Bill–Dann” owns the portfolio of trade marks covering from above 1 thousand of 100 types of dairy products (”Domic v derevne”, “Milaya Mila”, Neo, Bio-max, etc.) and more than 150 types of juices, nectars and soft drinks under marks “J7″, “100 % Gold”, etc. Net profit of public corporation “Wimm–Bill–Dann” on US GAAP in 2005 has increased for 31.7 % - up to 30.3 million dollars.

GoAir
Indian airline GoAir and planemaker Airbus have signed the agreement on purchase of 10 planes A320, press-service Airbus informs. Moreover the contract gives GoAir an opportunity of purchase in the future ten similar planes. The financial component of the transaction and terms of deliveries of planes are not informed.

Trading stock begins with an investor placing an order, which is informing the stockbroker as to what stock and how much he wants the broker to buy or sell. An order to buy or sell stock at the best possible price at the present time is called a market order. The broker conveys the order to an exchange member on the trading floor, who attempts to get a better price for the buyer by offering a little less. For example, the broker might offer 47 1/8 ($47.12.5) for the stock with a current price of 47 1/4 and see if someone will sell at this price. If the investor were selling, the broker would attempt to get a slightly higher price by offer
say, 47 3/8.
The final sale will then be electronically relayed to the bro¬ker who placed the order.
The investor might also place a limit order, which specifies the highest or lowest price at which the broker may buy or sell. If the investor can’t be accommodated immediately, the broker places the order in a sales book and then tries again in order of priority. If an investor wants to keep the order on the books he can issue an open order that instructs the broker to leave the order on the books until it is executed or canceled.
Sometimes the investor might give a discretionary order, which allows the broker to exercise judgment in making money. The investor leaves it up to the broker to decide when and at what price to buy or sell.
An odd lot is any number of shares less than 100. One hun¬dred shares comprise a round lot. Brokers usually trade shares in lots, odd lots being combined with a series of other small orders to forma round lot. A purchase of 10,000 shares is some¬times called a block sale.
In addition to the price of the stock, the investor pays the broker a commission for buying or selling the securities.
Sometimes investors pay less than the full amount when they buy stock. This is called margin trading. The FRS determines the minimum margin required. In recent years the stock margin has been approximately 50 percent. Fearing that the investor might sell the stock and abscond with the funds, the broker keeps stock certificates of margin accounts at the brokerage as collat¬eral. If the stocks were to plummet, the broker would call the investor and request that he put up more money or have the stock sold.
Active buyers of stock are called bulls. They believe that the prices of stocks are going to rise. During the mid 1980s, the US witnessed a very long bull market. At the 1987 crash even bulls became bears. A bear is an investor who makes a profit when the prices are going to fall. Selling short is a high-risk strategy which bears use in order to do that. They sell borrowed stock in the hope of later buying it on the open market at a lower price. Options are contracts that allow an investor to either buy or sell a security at a predetermined price within a certain time. Depending on the investor’s expectations, he may buy a put option or a call option. A put option grants the owner the right to sell a security. Believing that the price of certain shares will drop over some period of time an investor might buy an option and benefit from selling the shares at the option price to the person who sold the options. A call option grants its owner the right to buy a certain amount of stock at a predetermined price within a fixed period of time.

To my mind it would be necessary to know a little bit more about securities markets, than I know now. As I have already said securities are bought and sold at two types of securities mar¬kets: primary markets, which issue new securities, and second¬ary markets, where previously issued securities are bought and sold. If a company wants to sell a new issue of stock or bonds it usually negotiates with an investment bank, or underwriter, who sells the securities for it. The underwriter buys the securities from the corporation and resells then to individual investors through the secondary market.
Organized security exchanges have developed to make the buying and selling of securities easier. The securities exchanges consist of the individual investors, brokers, and intermediaries who deal in the purchase and sale of securities. Security exchanges do not buy or sell securities; they simply provide the location and services for the brokers who buy and sell.
A stockbroker handles stock transactions. A stockbro¬ker buys and sells securities for clients. Stockbrokers act on the clients’ orders. Stockbrokers receive a fee and are associated with a brokerage house. To trade on the exchange, a “seat” must be purchased. A seat is a membership. The members represent stockbrokers. When a stockbroker calls in an order to sell, the member representing that broker looks for a buyer at the price requested. When a broker calls in an order to buy, the exchange member looks for a buyer at the price offered.
The largest and best-known exchange in the USA is the New York Stock Exchange (NYSE) also called the “Big Board”. There are 1,300 seats on the NYSE and approximately 2,000 stocks and 3,400 bonds are traded daily. In. order to be listed on the NYSE, a firm has to meet the following requirements:
1. Pretax earnings of at least $2.5 million in the previous year.
2. Tangible assets of at least $16 million
3. At least 1 million shares of stock publicly held, and others.
The second largest stock exchange in the USA is the Ameri¬can Stock Exchange (AMEX). It is located in Manhattan and has about 500 full members and 400 associate members. AMEX oper¬ates in much the same way as NYSE, but smaller companies may qualify for listing.
There are also regional stock exchanges that serve regional markets.
The over the counter market (OTC) sells and buys unlisted securities outside of the organized securities exchanges. About 5,000 brokers of OTC are scattered all over the country. They trade unlisted stocks and bonds by phone and keep in contact with each other.
The prices of the securities are established by supply and demand. Electronic screens in the offices of the brokerage firms display OTC transactions, so brokers continually keep cus¬tomers up to date on the latest prices.
Options are traded on the major stock exchanges, but also on a special market for options, the Chicago Bond Options Ex¬change (СВОЕ).

It may sound like a house of cards, but many financial instruments in the global economy are based on nothing more than value of other financial instruments. Today it would be impossible to responsibly manage any significant international investment without an understanding of financial derivatives like options, financial futures, and interest rate swaps. A stock option, which allows an investor to purchase or sell a given stock at fixed price sometime in the future, is called a derivative because its value is determined by the value of underlying stock.
A financial future is an agreement to buy a financial instrument – such as a stock or bond – sometime in the future at a fixed price. A stock index future, for example, allows investors to benefit from the rise in a stock index by buying, in a sense, all the shares in the index. Just as a gold future goes up in value when gold’s price rises, a future on the Standard & Poor’s 500 will increase in value when the stock index rises.
The basic idea of a swap is to trade something you have for something you want. A swap is a trade agreement between two or more counterparties, usually banks, to exchange different assets or liabilities such as interest payments. Essentially, it allows both parties to obtain the right assets and cash flows for their own particular needs. In the case of banks, this most often means trading two loans with different interest rates or different foreign currencies. For example, a bank landing money to consumers at a fixed interest rate may be borrowing money at floating or periodically changing interest rates. In order to eliminate the risk of having borrowed and lent money at two different interest rates, the bank enters into an interest rate swap agreement with another institution to exchange one flow of interest rates for another.

The capital of a business consists of the funds used to start and run the business. The funds can be either the owner’s (equity capital) or creditor’s (debt capital). Equity capital consists of those funds provided to the business by the owner’s. These funds come from the personal savings of the owner. Debt capital consists of borrowed funds that the business owner owes to the lender. With debt capital the entrepreneur doesn’t have to share ownership, but has a legal obligation to repay the borrowed money (principal) plus interest at a future date even if the business does not make profit.
Equity financing (obtaining owner funds) can be exemplified by the sale of corporate stock. In this type of transaction, the corporation sells units of ownership known as shares of stock. Each share entitles purchaser to a certain amount of ownership. For example, if someone buys 100 shares of stock from Ford Motor Company, that person has purchased 100 shares worth of Ford resources, materials, plants, production and profits. The person purchases shares of stock is known as stockholder or shareholder.
All corporations, regardless of their size, receive their starting capital from issuing and selling shares of stock. The initial sales involve some risk on the part of the buyers because corporation has no record of performance. If the corporation is successful, the stockholder may profit through increased valuation of the shares of stock, as well as by receiving dividends. Dividends are proportional amounts of profit usually paid quarterly to stockholders. However, if the corporation is not successful, the stockholder may take losses on the initial stock investment.
Often equity financing does not provide the corporation with enough capital and it must turn to debt financing, or borrowing funds. One example of debts financing is the sale of corporate bonds. In this type of agreement, the corporation borrows money from investor in return for bond. The bond has maturity date, a deadline when the corporation must repay all of the money it has borrowed. The corporation must also make periodic interest payment to the bondholder during the time the money is borrowed. If these obligations are not met, the corporation can be forced to sell its assets in order to make payments to the bondholders.
So the investments in bonds are less profitable, but at the same time less risky for investor. Although for issuer is more preferably to obtain capital through issuing shares of stock.
All businesses need financial support. Equity financing (as in the sale of stock) and debt financing (as in the sale of bonds) provide important means by which a corporation may obtain its capital.

To my mind, first of all I should gain an understanding of types of securities. As far as I know there are many types of securities. And how can I choose some of them with the highest expected return and liquidity and the lowest risks? I want understand why I should buy or sell exactly this or that type of security. So let’s try to investigate…
            In theory there are several groups of securities:

• Equity Securities;
  
• Fixed Income Securities;
  
•  Investment Funds;
  
• Units & Trusts;
  
• Options, Warrants & Rights;
  
• Futures Contracts.
  

So, equity securities: common shares, restricted voting shares, preferred shares, flow-through shares.
As far as I understand securities of this group have practically the same liquidity. As for expected return: the capital gains potential of common shares is usually higher than for preferred shares of the same company. And return on flow-through shares will depend on the potential tax benefits to the investor. Then risks… The most risky securities of this group are flow-through shares, if I’m not mistaken. But all risks of all of them are moderate to high. So among securities of this group I’ll choose common shares. To my mind the balance of return and risks is the best!
The second group: savings bonds, bonds, debentures, treasury bills (T-bills), Guaranteed Investment Certificates (GICs).

If I’m not mistaken investment of money in treasury bills is more profitable. Yes, among securities of this group I will choose exactly treasury bills.
            The third group and investments funds: shares or units of Mutual Funds, shares or units of Closed-End Investment Funds, units of Segregated Funds and shares of Labour-Sponsored Investment Funds.

Then go units and trusts: limited partnership units and trust units.

Did you ever think about such questions as when and where the first stock exchange appeared? It was very interesting for me to try to get to know of its story.
So, I’d like to impart this information to you. Predecessors to modern stock exchange were medieval fairs where people could buy or sell bills of exchange. First it was in France in 12th century. There appeared guys who managed and regulated the debts of agricultural communities on behalf of the banks. We could call them first brokers.
Venetian bankers began to trade in government securities in the middle of the 13th century. Later the Dutch started joint stock companies, which let shareholders invest in business ventures. Then the Dutch East India Company issued the first shares on the Amsterdam Stock Exchange in 1611. It was the first company to issue stocks and bonds. And the Amsterdam Stock Exchange is the oldest stock exchange in the world that exists at present time.
Right up to 1913 the Amsterdam Stock Exchange was the universal exchange where traders sold and bought both goods and seсurities. Just here all methods of security trade (for example, term deals, options, carry-over deals, margin deals, etc.) came into the world.
The technique of security trade was similar to the technique of exchange trade of goods, but insensibly the specific rules of conduct were elaborated. The greatest complexity for traders was the prohibition, which was implemented in 1622, “not to make the air blue”.
At the begining the access to the Amsterdam Stock Exchange was free; any trader had the right to to make bargain with anyone. Conclusion contract finished with the hand shake, which was one of the rules of the stock exchange.
As for stocks, only stocks of the first stock company in the Netherlands (Joint East India Company) circulated at the Stock Exchange.
The stock exchange based in Amsterdam merged on September 22, 2000 with the Brussels Stock Exchange and the Paris Stock Exchange to form Euronext, and is now known as Euronext Amsterdam.
The second according to the time of origing was the stock market of Great Britain. Exactly at the England territory made its appearance the first specialised exchange, when in 1773 London brokers rented a specil accommodation for their meetings. Membership at the stock exchange the same way as at the Amsterdam Stock Exchange was free, anyone who wished were able to take part in trade, but he had to pay for it 6 pence per day.

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