Unit 8. The Stock Market.

1. KEY VOCABULARY. (SB: page 74) Learn

A company can raise money on the stock market or stock exchange (a market place for buying and selling shares) in two different ways.

It can issue shares (US stocks) or units of its capital, to institutional investors or the general public. Different types of shares or equities are available, but the most common are known as ordinary or common shares (US common stock). When an investor buys a share, using the services of a specialist company or broker, he or she becomes a shareholder (US stockholder) and owns a part of (or has a stake in) a company. Shareholders can make money by receiving dividends, paid as a proportion of a company’s annual profits, and when the value of their shares increases.

A company can also borrow money from investors by issuing bonds, loans for fixed periods with fixed interest rates.

Securities refer to both shares and bonds. Each year billions of shares and bonds are sold or traded on the world’s major stock exchanges.

2. LEAD IN. A PERSONAL EXPERIENCE OF INVESTING ON THE STOCK MARKET. (SB: page 75) Retell:

When I decided to invest on the stock exchange, I got advice from a broker on the type of investments to make. She told me that it was really important to diversify so I did, both geographically and sector wise. I invested in Europe and the United States and I have stock in almost every business sector. I have preferred stocks (привилегированные акции) in Healthcare, Food, Transportation, Banking and Information Technology sector.

I decided against buying bonds. Government Bonds are only interesting when you live in the States because you may pay less tax there if you buy bonds from the government. However, as I live in Europe, I prefer to buy ‘preferred stocks’. They have to be bought through a broker and are similar to bonds as it is like making a loan to a company instead of to the government. The company pays you back before paying common stock or ordinary shares. However, they are riskier than bonds but the returns are much higher – 7 to 8,5%. I prefer to take the risk and get higher returns.

My broker looks after my investments but I like to keep up-to-date with them. In fact, I check on them several times a day. I track them on the Internet. There are lots of ‘internet portfolio trackers’ now. I use the CBS one. You have to enter in the number of stocks you have, the symbol of each company, the price you have paid and the date you bought them then it will give you your profits and losses. In fact the information on how your stocks are doing is updated every five minutes.

3. VOCABULARY TO LEARN (SB ex 1 page 77)

• to log on •a boom • Web surfing • commission

•to catch up with • lucrative • to amount to •a regulator

•a collapse • a bid (a price offered)

• NASDAQ – a US electronic stock exchange •NYSE - New York Stock Exchange

• Dow Jones – an index of the share prices quoted on NYSE • Nikkei Index – Tokyo stock exchange

PHRASAL VERBS; (SB page 78)

• to buy up (to purchase) • to look after (to supervise) • to go about (to start doing)

• to think over (to reflect upon) • to point out (to draw attention to) • to call on (to visit)

• to call off (to cancel) • to let down (to disappoint)

4. (SB: ex 2 page 77) Complete the passage about a transaction on the stock exchange using the words and learn it.

•stock market •shareholder • dividends •broker •commission •shares

Janis Williams has decided to invest a part of her savings on the (1) ________ _________. She contacts a (2) _________ for further advice about how to do this, and he recommends a selection of different companies’(3) _________ that she might be interested in buying. He also explains how these companies have performed in the past and how much she can expect to receive in (4) _________. He tells her how the transaction will be carried out and lets her know how much (5) ________ she will have to pay for the service. Once Janis has agreed to the terms, he contacts his representative on the stock exchange, who arranges the transaction. At the end of the day the transaction has been completed and Janis has become a (6)_____________________.

5. STOCK MARKETS AND INDEXES. Read for information. (WB: ex.6 page 43

Tapescript WB page IV)

NASDAQ - North American Securities Dealers Automated Quotations - ( котировки акций )

The NASDAQ Stock Market is the fastest growing major stock market in the world. Its most distinctive feature is that it was the first electronic- based stock market ever created. More than half of the shares that change hands in the United States each day do so on NASDAQ. Nearly five and a half thousand companies trade their securities on this market.

NASDAQ stands apart from the other stock exchanges through its use of today’s information technologies – computers and telecommunications in place of the traditional trading floor. NASDAQ is a dealer market. dealers known as Market Makers provide competing to buy and offers to sell stocks through vast computer networks.

They use their own capital to buy and sell NASDAQ securities. • This differs from an auction market where a specialist or ‘dealer controls all sales in a specific security on the floor of a stock exchange.

NYSE (New York Stock Exchange) is a customer oriented, two-way auction market where transactions take place as a result of open outcry of bids and offers made by members acting on behalf of their customers. Buyers and sellers meet directly on the trading floor – whether their orders arrive electronically or are handled by a broker. The prices are determined by the interplay of supply and demand. This differs from the dealer market like NASDAQ where a dispersed group of brokers trade securities from their own inventories.

Dow Jones Index ( or Dow Jones Industrial Average.) People use the Dow Jones index to measure the health of the stock market. It is 30 companies from NYCE that were chosen from different sectors of the economy and which are believed to reflect the best overall movement on the stock exchange. So when someone says, ‘the Dow Jones was up 30 points today it means that the market is doing well.

6 WRITING A LETTER OF INVITATION AND POSSIBLE REPLIES. (Not in the SB)

Read the letters, Choose the best words from the options in brackets.

WRITE three letters according to the models but containing your own information:

a) A letter of invitation You invite a guest of honor to the annual dinner of your work group. Address it to the Public Relations Manager of the company sponsoring your project on ……… You know the person by name.

Дата добавления: 2015-11-16