Wh^Lexac_tlyjsa_ share?
A share is a part of a company, offered for sale to the public. The company is
able to raise cash for expansion and new ventures by selling shares to investors.
Some companies - family businesses, for example - do not trade their shares.
Firms than do are known as public limited companies (pic), and seek a listing on
the Stock Exchange.
The first time it «goes public» (aslo known as a flotation), a company will often
announce its intentions with advertisements in the press. This is called an offer
for sale.
a shareholder?
As a shareholder, you are an owner of the company and are entitled to take part
in its decisions. You are sent an annual company report; you can vote on company
issues; and you have the right to attend shareholders' meetings.
If the company is doing well and profits rise, you benefit. Your shares should be
worth more than when you bought them; and you may receive an income or
dividend.
How can_s hares make moneyJor_yQ_u?_
A share's value is not fixed. Its price is determined by many things: the company';
recent performance; the state of the sector of the economy the company trades
in; national and international economic and political changes; the level of
consumer demand; and the peculiarly unpredictable human factors of confidence
and pessimism.
So, if you buy a share at one price and sell it at a higher price, you make a profit;
if you sell it at a lower price, you make a loss.
Shares can provide an income (though not necessarily a regular one) through
the payment of dividends. However, a company can choose not to pay a dividend
at all, investing any profits back into the company.
Ordinary shares
As a private investor in the stockmarket, you will almost always be dealing with
what are known as ordinary shares. You may come across some other types of
shares.
Preference shares
These shares earn a fixed income. Their owners are entitled to receive any dividend before the holders of ordinary shares. If a company is wound up, preference shareholders are paid first, once all the creditors have been paid in full.
Unlisted securities^
Companies which are not big enough for a Stock Exchange listing, or which do not wish to pay for listing, can trade their shares on a secondary market, the Unlisted Securities Market (USM). USM shares are highly volatile.
_ or gilt-edged securities - are securities issued by the British government carry a fixed rate of interest, usually for a set term, and are traded on the arket. The money that they raise funds government spending. They can be _ longs, with a redemption date more than fifteen years away - mediums, with a redemption date of between five and fifteen years -shorts, with a redemption date of five years or less. Some gilts are undated, witti no fixed redemption date. Generally gilt prices fluctuate according to interest rate movements. f^fvvting your shares
For steady long-term investment, you should consider bluechip shares. These are the shares of secure and respected British companies, many of which are household names: for example, ВТ, 1C!, Glaxo and Marks & Spencer. The term «blue chip» derives from the highest-value chip in a game of poker, You are unlikely to see spectacularly fast rises in their share prices, but it is likely that over a number of years they will earn steady profits for their shareholders. These shares will be listed on the FT-SE 100 Index (nicknamed the Footsie) which was started in 1 984 at 1,000 points and is based on the Stock Exchange's 100 largest listed companies. Footsie is often quoted to show the state of the stockmarket.
Two prices are always quoted: the offer price (the higher price, and the one at which you buy shares), and the bid price (the lower price, and the one at which you sell shares). The price you will usually see quoted, in the newspapers for example, is the mid price, halfway between the bid and offer prices. To understand this idea of bid and offer prices, it may be helpful to think of what you see when you buy foreign currency; in the bank or bureau de change there are two sets of figures, headed «We buy» and «We se!b.
Discussion
1. Do you think Stock Exchanges are necessary in general and in this
country in particular?
2. Wouid you share the idea that this way of exchanging stocks and shares
15 quite efficient for the public?
3. What do you corne to know about the largest securities markets in the
world?
4. How can you characterize the activity of an exchange member? Is it an
*sy way to become RR?
5. How can you explain the term «listed companies»?
6- In what way do people contribute to the economic growth of a country?
7- Is investing on the Stock Exchange a risky business? Comment on this.
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Topical vocabulary
banking institutions savings
commercial banks merchant
to issue
notes
personal cheques
money
shares to undertake
management
monetary policy to pay interest on the account receipt of deposits transfer of money encashment to save money to keep money safe to lend = to loan (to make a loan) lender to borrow borrower to deposit a depositor insolvent legal tender
Unit 6 BANKING
банковские учреждения сберегательные
| банки |
коммерческие торговые
- выпускать, выдавать
- проводить, осуществлять
- кредитно-денежная политика
- платить процент по счёту
- получение вкладов
-перевод денег
- оплата наличными
- экономить; сберегать, копить
- хранить
-давать взаймы
- заимодавец
- брать в кредит
-заёмщик
- положить на счет (срочный)
вкладчик
неплатежеспособный законное платёжное средство
Text A
The British banking system has developed over the past few hundred
pars to become one of the most highly specialised financial centres in the western
vortd The head offices or main branches of banking institutions are concentrated
in the City of London: the Bank of England and the most important commercial
and merchant banks are situated in close proximity* to one another.
The Bank of England is the central bank of the United Kingdom. It was founded in 1694 by Royal Charter*. It acts as the bank for the Government and works in close cooperation with the other banks: as the central note-issuing authority* and as agent of the Government for important financial operations. The Bank also undertakes management of the National Debt* and the administration of exchange* control. Thus it is through the Bank of England that the Government's monetary policy is implemented.
Savings banks keep money safe until it is needed. The National Savings Bank receives money from its customers in two distinct forms: en current account and on deposit account. With a current account, a customer can issue personal cheques. No interest is paid by the bank on this type of account. With a deposit account however, the customer undertakes to leave his money in the bank for a specified* period of time. Interest is paid on this money.
The commercial banks, owned by shareholders and working for profit, offer many services. Their primary business is receipt, transfer and encashment of different types of deposits. They receive money from savers on current and deposit accounts and in their turn lend the deposited money to customers who need capital. This activity earns interest for the bank and this interest is almost aJways at a higher rate than any interest which the bank pays to its depositors. In this way the bank makes its main profit. If a bank lends out too much and cannot repay its depositirs when they want their money back, it is insolvent. This is known as a bank «crashing». The major commercial banks in Great Britain are: National Westminster, Barclays, Lloyds and Midland - the «Big Four».
The merchant banks are in many ways different from commercial banks as they deal mainly with businesses. Their services include: issuing shares for companies; arranging international payments and finance; making large loans to UK and foreign businesses; taking large deposits from businesses and managing investments for businesses and other organizations. Some merchant banks are known as accepting houses* as they specialise in acceptance credit*. Others are called issuing houses* as they float* new issues of shares on the capital market, both at home and overseas*.
foximity - близость
R°yal Charter - Королевская грамота
uthority - зд. учредитель
ational Debt - государственный долг
exchange - зд.обмен
to specify - указывать, специально упоминать specified - указанный, определённый
accepting house-акцептный дом: торговый банк по международной торговле acceptance credit ~ акцептный кредит: метод платежа в международной торговле
issuing house - эмиссионный дом: банк, организующий еыпуск ценных бумаг
to float - зд. выпускать
at home and overseas - в своей стране и за рубежом
/ Discussion
I. Answer the following questions:
1. Is the British banking system young or old?
2. Where are the head offices of banking institutions concentrated?
3. What do you know about the central bank of the United Kingdom?
4. How is the Government's monetary policy implemented through the
Bank of England?
5. What is the main function of British savings banks?
6. In what forms do the savings banks receive money from their customers? I
7. What is the difference between these two types of accounts?
8. What services are offered by commercial banks? What is their primary j
business?
9. In what way do commercial banks make profit?
10. Why may the bank become insolvent?
11. What are the major commercial banks of Great Britain?
12. What are the main activities of merchant banks in Great Britain?
II. Speak about the main types of banks in Great Britain.
III. Can you compare British banking institutions with those of Russia? Tatarstan? I
What is the name of the head banking office in this country?
IV. Read the text about the main functions of banks in the world economy. Say: I
1. What is the main concern of banks in every developed country?
2. How can banks help the government to stabilize economy and prevent
inflation?
3. Why is it so important for the banking system to rest upon a basis of
trust?
Banks in Great Britain as in every developed country are closely concerned with the flow of money into and out of the economy. They often cooperate with the Government in its efforts to stabilize economies and io prevent inflation.
v are specialists in the business of providing capital, and in allocating funds credit. We can say that the primary function of a bank today is to act as an. termediary between depositors who wish to make interest on their savings and borrowers who wish to obtain capital.The bank is a reservoir of loanable money, with streams of money flowing in and out. For this reason, economists antj financiers often talk of money being «liquid», or of the «liquidity» of money. The system of banking rests upon a basis of trust. Innumerable acts of trust build up the system of which bankers, depositors and borrowers are part. They ail agree to behave in certain predictable ways in relation to each other, and in relation to the rapid fluctuations of credit and debit. Consequently, business can be done and cheques can be written without any legal tender visibly changing hands. Banks were organized as places to which people took their valuables for safe-keeping, but today the great banks of the world have many functions in addition to acting as guardians of valuable private possessions.
A list of terminology concerning banking services Opening an account
| - иметь счёт в банке - процент по счёту - платить два процента - образец подписи - подлинная подпись - первоначальная сумма - счёт в рублях (долларах) - текущий счёт - срочный (депозитный) счёт - счёт, на который перечисляется зарплата - счёт ссуд - ссуда частному лицу (обычно без обеспечения) - приказ о регулярных платежах |
to have an account with /in the bank
interest on an account
to pay an interest of 2%
a specimen of signature
genuine signature
initial sum
account in roubles (dollars)
current account (UK)
checking account (USA)
deposit account (UK)
savings account (UK, USA)
salary account
loan account Personal loan
standing order
Paying into an account
j° Pay in /into an account
| - положить /зачислить деньги на счёт |
•° Put some money into an account
to deposit /to put in smb's account
| from an account - снимать (деньги) со счёта |
| - остаток - овердрафт (сумма, получаемая по чеку сверх остатка на текущем счету) Making a transfer to transfer money from an account to make the transfer to the bank in somebody's name bank charges commission (UK) service charges (USA) to charge a commission extra charge to make payment(s) to confirm the transfer to collect the transfer Buying and changing foreign currency to buy (self) foreign currency - покупать (продавать) иностранную валюту - менять рубли на доллары - обменять на... |
| - перевести деньги со счёта -перевести банку - на имя... - комиссионные - брать комиссионные -дополнительные сборы - платить, выплачивать - подтвердить перевод - получить деньги по переводу |