The most frequent questions
1 - What is a stock?
The stock market is a form of official activities. Various stock types include: 1. Stock Exchange, (2), Commodity Exchange (3) Currency Exchange 4. Derivative Exchange.
Stock Exchange official market of the securities listed in it according to certain rules and regulations are traded between buyers and sellers. The main task of Stock Exchange is providing a transparent market (providing complete information for buyers and sellers) to trade Stock Exchange.
Trading the stocks is carried out by brokers. The brokers bring the stocks on behalf of shareholders orders into the trading system. The auction will be conducted on the basis of bilateral trading system. The buying shifts are arranged based on the highest prices in each moment and turns sorted by lowest price at any time and whenever the best deal on the purchase price and the best selling price was equal to the equity.
The broker is a legal (Corporate) person by whom buying and selling the stock is done. Brokerage license is given to individuals that have certain features, such as owning professional experience, passing the entrance exam and being honest, and in accordance with the regulations of Stock Market of Islamic Republic of Iran, must have Membership in the Association of Brokers, admission to trade in the Stock Exchange and have the activity license in stock .
5 - What is the trading code and how is it received?
Trading transactions is done through the trading code on the system. Trading code is a fixed code through which the investor is recognized by the trading system. This code is created based on an investors individual profile including first three letters of the last name of an individual investor and a five-digit number that is determined automatically by the computer system. Therefore, purchase and sale of stock exchange depends on the receipt of the trading code which is done by the broker and it is possible by providing identification documents such as birth certificates and national codes. Getting the Trading Code for legal entities (corporates) requires the companys Articles of Association and the Official gazette.
6 – How much is the cost of trading shares for shareholders on the stock exchange?
The amount that the buyer pays for the purchase orders is worth 0.4 percent of the purchase amount and 0.15 percent of the purchase value is a commission fees for as the Stock development. For sales orders, in addition to brokerage fees 0.5 percent of the sales tax is paid as the commission for Stock development. The minimum Broker fee is 15,000 Rials and the maximum is 100 million Rials.
The amount from the sale of shares is receivable in three business days after the transaction. On Working days include days of the week except Thursdays and official holidays.
The Transfer license and transferring the Deposit stock will be ready for delivering to the buyers of the stock in the brokerage place one business day after the transaction. Selling the purchased stock is possible when you receive a certificate of transfer and the stock deposit.
Stock price could change at any moments and due to changes in market supply and demand. If the number of share sellers exceed the number of buyers; that is, the supply exceeds the demand for the purchase of a share sale, the share price decreases and vice versa. To describe the behavior that leads into changes in supply and demand in the stock market and causes that some people are buyers of share while others refuse to buy shares, some opinions are formed. Some people believe that the most important factor of about the price of a companys shares is the investors opinion about the real value of that companys shares. In this context, a reduction in the stock price could be the result of internal and external factors ranging from corporate finance and macro issues of political and economic world, and industrial countries in which the company operates. Also, in most cases when companies pay interest to shareholders or increase the capital, the companys share price decreases and this decrease in price is quite normal. Because, for example, at the time of the capital increase, the number of shares of the company increased as the amount of the capital increases and an increase in the number of shares, to some extent, makes up the reduction in price.
General Assembly of joint-stock company is made up of stakeholders community. Provisions relating to the presence of required numbers to hold the General Assembly and required votes for making decisions will be determined in the Articles of Association of the company, except in cases for which a particular task is assigned by the law. According to the Commercial Code, public corporations include founder General Assembly, Conventional General Assembly and Extraordinary General Assembly.
The Founder General Assembly carries out the following tasks: (1) considering the reports of its founders and approving them, as well as subscribing all stocks of the company and obtaining the necessary funds. 2. Approving the companys Articles of Association and, if necessary, correcting it. 3. Selecting the first directors and the inspector/ inspectors. 4. Determining a widely circulated newspaper in which there any invitations and further announcements until the first general assembly of shareholders will be published.
Annual General Assembly is held once a year to consider the companys financial statements, directors and inspectors reports and sharing the profits among the shareholders anticipated in the Articles of Association. The general assembly is held officially when attended by at least half of the shareholders depending on the number of shares to and decisions made by a majority of half plus one of the votes present at the formal session will be valid. Legal Annual General Assembly moratorium, according to the commercial law, must be held up to 4 months after the end of the fiscal year of the company. Shareholders should be invited to the General Assembly through the publication of advertisements in official newspapers, and the official website of the Company. The time between the ad publication and the date of Assembly must be at least 10 days and a maximum of 40 days.
13 – What is Extraordinary General Assembly and when is it held?
Subjects like correcting or changing the Articles of Association of the company, increases or decreases in capital and companys liquidation are only addressed in the General Assembly. At an extraordinary general meeting more than half the shares holders that have voting rights must be present and always with a majority of two third of votes of the present shareholders, the Assembly will be valid in formal session.
14 - What is a capital increase?
Whenever a company needs new financial resources to develop its activities, by the Board of Directors proposal, the shareholders vote about the capital increase at an extraordinary session of the General Assembly to increase the capital of the company as much as required.
15 - What are the methods of raising capital?
Company can increase their capital three methods. A) From the retained earnings and reserves and development projects in the form of bonus shares b) the cash and receivables in the form of priority c) of the spent shares. In the first method of the company, new shares resulting from a capital increase are given to shareholders and for doing this the shareholders dont need to pay any amounts. In the second method, the new shares resulting from a capital increase in exchange are sold based on each 1,000 Rials for each priority (per share price) to shareholders. In the third method, by removing the priority right of shareholders, new shares resulting from the capital increase subscription price of the market is underwritten by all the applicants.
The capital increase is awarded to shareholders who own the companys share in the date of implementation of the General Assembly approval on the capital increase.
For being informed of how to receive new bonds due to the increase in the capital of each accepted company on the stock exchange you could contact the information center of trading halls or the respective companys stock affairs.
18 - What is the difference between the deposit stocks of non-deposit stocks?
Deposit stock is traded in the Trading System of Stock Exchange and its share sheet is published by the stock exchange. But non-deposit stocks are not traded on the stock exchange market and its share sheet is printed by the respective company.
For changing non-deposit stocks to deposit shares, the share sheet of the company stock shares, stock brokers on the trading floor is delivered to one of the then deliver it to the stock exchange, the share of deposits by the Organization tab companys share null and tab printing stock and then deliver the relevant broker.
The free float shares are the shares that are expected to be tradable in the near future; that is, they are owned by the people who are ready to offer them for if a proper bid is offered by the buyers.
21 – What is the meaning of "the fifty most active companies"?
The 50 most active stock companies which the liquidity power of their shares are more than other firms. In other words, the demand for shares of these companies shares is higher than other listed companies in the stock market.
Selecting the 50 most active companies stock market based on six criteria, is done in three-month intervals and all of these criteria refer to the liquidity of the stock. The criteria are: 1. the number of traded shares, (2) value of traded shares, (3) days of the transactions, 4. the transaction numbers 5. The average number of issued shares, 6- average current value of the companys stock.
Corporate marks stopping in the event of any one of the following: 1. When holding general assemblies, 2. Changing the Company location, 3. Adjustment of EPS , 4 - The capital increase, 5. Determination of board members, 6. Not presenting clear information to the exchange.
Earnings per share or EPS (in abbreviation), is calculated by dividing the net profit after tax, into the total number of Company shares.
A measure that compares the annual income of a share with its market price and by dividing the market price into earnings of a share (EPS) is obtained.
Every year the companies maintain a part of their net profit according to the law (Legal reserve) and another part based on the companys need and the rest is shared among the shareholders. Therefore, the dividend profit per share dividend is obtained by sharing the total dividable profit of company shares.
According to the Commercial Code, if profit sharing is approved in the annual General Assembly, the company must, within 8 months from the date of approval, pay the DPS to shareholders.
For information on the amount and how to get DPS of all companies listed on the Stock Exchange, you can contact the trading floors information units or the respective companys Stock Affairs.
Profit per share is given to the shareholders who own shares on the date of companys annual General Assembly.
30 - What is "the legal reserves"?
Every year, board of directors in every company must store 5% of net profit as "legal reserve". As the legal reserve reached 10% of the total capital of the company, saving it is optional.
31 - What is the primary market?
It is the market in which stocks are published for sale by a publisher such as a company or the government in order to finance for the first time (for supply to the public).
In this stock market, the stocks which have already been published and are in the hands of holders are traded. Examples of such stock market is the Stock Exchange in which the task is done through brokers.
It is a price written on the stock sheet when it is published by a Company. The figure, in accordance with Article 29 of the Commercial Code shall not be more than 10,000 rials but as usual in most companies listed on the stock exchange this amount is 1000 rials.
It is a price at which the shares are traded on the stock exchange.
It is a collection of stocks listed on the stock exchange.
In order to reduce the risk of people instead of buying shares of a company to buy shares of companies drawn in other words you should not place all your eggs in one container.
Its the process of purchasing securities of the issuer or his representative and the payment or full payment obligation under the contract.
If the company wants to raise capital from retained earnings without getting any money, new shares are issued to shareholders provide this type of contribution, bonus stock is called.
Corporations every year, instead of paying a percentage of profits to shareholders, maintain them with different goals, and the confluence of these benefits during storage years is called retained earnings. The interest rate is kept in a separate account.
A legal person who for the purpose of balancing the supply and demand for shares of a particular company and increase its liquidity in the market buys and sells those shares.
41 - What is a share?
Each corporation is divided into equal Shares which are considered as stock and the nominal price of shares is usually 1,000 Rials in Iran. If we want to classify shares based on the share holders rights, there are two kinds of shars.
· Common stock
Ordinary shareholders who are the main owners of the rights and privileges which are:
In addition to the above-mentioned advantages, the Preferred Stock holders have the priority of receiving a nominal value of their shares during the liquidation of the company rather than holders of ordinary shares.
42 – Which shares should be bought?
Buy stocks after investigation and consulting with reliable people.
Stock market investors are eager to invest in one of three categories:
Of course, there are people who sell shares and buy new shares every week and called the Swing Catchers.
What is the priority?
Stock companies can develop their activities in order to increase their capital. The capital increase is done in different ways. One way to increase its capital to increase their capital through cash and is carried out with the release of priority. The percentage increase in the companys capital, publishes a certificate of priority and give them to its shareholders.
For example, suppose a company has 1000 shares and 50% capital increase. In this case, everybody receives priority equal to half of their shares. In other words, the ones who own 20 shares receive 10 priorities.
Now the investor has three options:
What is Stopping and reopening the symbol?
Companies will stop trading stock in certain circumstances. In this case, the Symbol of corporations is technically stopped and their shareholders will not be able to trade the companys shares.
After the withdrawal of the special status and the opening of the company symbolizes the companys shares will resume trading
Stopping the Symbol?
In the following cases exclusively the Exchange after receiving electronic message from publishers office organization, takes action to stop the icon (symbol):
A. Before holding general assemblies of the shareholders of all companies and managers which is scheduled to hold in a board of directors meeting on authorities given by the General Assembly deciding to increase the capital.
All stops of this Article two days before the meeting takes place, except for the extraordinary general assembly meetings that corporate taxes have a direct impact, such as selecting managers, inspectors, auditors, and the symbol of the company should be stopped from the day before.
(B) three days before maturity on the account interest payments and maturities of stock bonds
In the above-outs office after receiving the letter or message exchange, organization before stopping a symbol, a symbol of time and due to stop through electronic message system and website to inform market participants reached deals.
Immediately after receiving the letter or electronic message exchange Administration publishers inform the organization about important events in the company, if the transactions suspected of
using inside information or manipulate prices in the market share or there is a material news, CEO of the stock exchange and can issue orders to halt icon.
In this case, the stock immediately after receiving orders to stop the action icon and symbol pursued to fix Stop.
In the following exchange is an initiative to stop the action icon :
1. Change in classification of boards or industry
In addition, the stock organization in order to prevent suspicious cases in the stock can stop a corporate logo for a maximum of 30 minutes and inquire into the matter with the concerned authorities. Obviously, continuing to stop the logo will depend on the managing director of the exchange.
What does opening a logo mean?
If the logos are stopped by a letter or electronic message of the observation department on the organizations stock publishers, the stopped logo will be reopened after the release of new information by observation department on the organizations stock publishers by writting a letter or sending an email to the exchange. This will be carried out a day after receiving the message or letter from the respected department.
1. Reopening of logos that due to suspicion of using secret information, market manipulation or an important news the market has stalled, with the order of the authority within 3 working days after stopping time will reopen.
2. The opening of logos that are stopped to change the classification symbol is made up to 2 days after stop.
Reopening all logos with message exchange on the trading system and the web site takes place at least 15 minutes before the opening exchange.