Glossary
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C
CAGR:Compound Annual Growth Rate.
Profit made through capital speculation, including the purchase and sales of shares, interest on financial investments, rent and sale of real estate among others.
Earnings distributed to the quota holders of a fund and resulting from the sale of securities from the fund's portfolio.
The addition of new funds or capital reserves to a company’s assets approved by a Special Shareholders’ Meeting. Capital increases are normally achieved through a bonus (or increase in shares’ face value) and/or subscription rights for shareholders, but they can also be made through the acquisition of other companies.
A network formed by the stock exchanges and financial institutions that trade securities issued by companies, and whose purpose is to channel the resources available to finance trade, industry, and government expenditure. It plays a major role in the economic growth of a country.
This term refers to the whole network of stock exchanges and financial institutions (banks, investment and insurance companies) that deal with the purchase and sale of long-term securities (stock and bonds in general). Its purpose is to channel savings (cash resources) to society for trading, industry, other economic activities and the government itself. It is different from the money market, which deals with resources in the short term, even though they share many institutions. In the most developed capitalist countries, securities market is stronger and more dynamic. The weakness of this market in developing countries makes it difficult to accumulate savings, and this is a major obstacle to development. As a result, these countries have to resort to international securities markets.
An increase in a company’s assets through the issuance of shares.
It is an account under Assets. These are liquid funds available for the company, such as cash, investment funds or securities that can be marketed immediately.
It is the company's cash inflow and outflow. It is also a demonstrative and chronological chart of expected inflow and outflow of cash at a future period of time (days, months or years). This is an essential tool for an operating company’s financial planning or for the introduction of a project. In the latter case, a cash flow analysis makes it possible to set the break-even point of the project.
On the stock market, it refers to purchase and sale transactions whose maturity is up to the fifth working day after operations are made. The seller must give the buyer the securities and pay accordingly; on the commodities market, it refers to transactions made upon immediate payment and delivery of commodities.
An indicator of the annual financial return of an action.
Brazilian Company for Settlement and Custody: A closely-held corporation that offers services such as compensation, settlement and control risk of operations. CBLC also offers the Service of Fungible Custody of assets and manages Banco de Títulos CBLC – BTC. It is a self-regulating organization supervised by CVM (the Brazilian counterpart of the Securities and Exchange Commission).
Abbreviation for Certificate of Bank Deposit, issued by banks. It is a kind of investment that pays a prefixed or post-fixed interest rate depending on how it was negotiated. The buyer lends money to a bank in exchange for a negotiated yield, with a minimum holding period of 30 days.
Abbreviation for Interbank Certificate of Deposit. It is not only an indicator, but also a type of investment paying an interest rate. It is only negotiated between banks for a holding period of one day. The ordinary investor cannot by CDIs. The daily average CDI rate is used as a reference for the cost of money (in other words, interest) and a tool to evaluate the profitability of fund investments.
Issued by the Central Bank, it is a fixed-income bond, where the buyer knows exactly the amount to be redeemed. It has, therefore, a fluctuation risk due to interest rates.
Abbreviation for Clearing House for the Custody and Financial Settlements of Securities. It is the entity that keeps custody of, registers and settles the operations made with all private securities and state and municipal bonds not following the rules for debt rollover.
A business corporation in which the capital stock is shared by few shareholders. In addition, shares are not traded in stock exchanges and are sold or traded under shareholders’ consent only.
An index used by insurance companies that combines operating expenses, administrative expenses and marketing expenses, divided by the insurance premium. Consequently, the lower the index, the more efficient the company.
Dollar rate used in import and export operations and many financial operations, such as: investments in the country, dividend remittance, interest payment, etc.
A security issued by publicly-held companies to raise public funds to finance its working capital.
A term that refers to a type of usually farming or mineral product of great economic importance worldwide. Commodities, such as petroleum, soybeans, meat, cotton, steel, copper, etc., are widely negotiated among importers and exporters.
Shares that entitle their owners to vote on administrative issues.
Designation given to a person who authorizes another to buy, sell or act under his or her orders upon payment of a commission.
It is researched by FIPE and measures consumer price variations in São Paulo for families with incomes from 1 to 20 minimum wages. A provisional index corresponding to the last four weeks is announced on a weekly basis.
Those which allow the bearer to convert them into shares on previously set terms and at a certain time.
Monetary Policy Committee. The Central Bank committee that meets periodically to make decisions concerning interest rates among others.
This term describes the practices and relationships among shareholders and quota holders, the Board of Directors, Executive Board, Independent Audit and Statutory Audit Committee. The goal is to optimize the company’s performance and make access to capital easier. The term is designed to include all the issues related to the controlling power and management of a company, as well as the different forms and levels of their exercise and the different interests somehow connected to the life of commercial companies.
They are the direct producing costs, such as raw materials, labor, plant rent and energy, equipment depreciation, etc.
They are Federal, State and Municipal government payments resulting from court decisions. The Constitution allows States and cities to issue bonds to make payments ordered by courts before 1988 only.
Provisional Contribution on Financial Transactions. A tax applied to each debit from banking accounts, both of individuals or legal entities, at a 0.38% rate. Funds collected are used to finance federal government projects. The tax reform currently under discussion in Congress is intended to make this tax permanent.
It is a private organization, with rules and regulations approved by the National Monetary Council, which manages a hedging mechanism for bank and savings account holders and financial market investors. The guarantee is limited to R$ 20,000 and uses the sum of all the balance in bank and savings accounts and Bank Deposit Certificates.
It is the risk that the issuer of a security (debenture, Promissory Note, Commercial Paper, etc.) may not pay the principal and/or interest.
They are the company’s most liquid assets. In other words, they can easily and quickly be converted into money, e.g., trade receivables. In technical accounting language, they are defined as properties that can be realized in less than 365 days after the closing of the business year.
An identification number given to a security or stock issuance to make operation clearing easier. The US system is administered by CUSIP - Committee on Uniform Security Identification Procedures.
Custody Fee:A fee charged by a securities broker for keeping their clients’ shares under its responsibility.
The Brazilian Securities and Exchange Commission. It was created by Law 6385/76 to discipline the operations of the securities market and the activities of its participants (publicly-held companies, brokers and investors). It is entitled to discipline, regulate and inspect the activities of the different participants in this market.
