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partly paid
Shares for which the buyer pays only part of the issue price initially, paying for the rest at predetermined dates, on the last of which they become fully paid.
personal equity plan (PEP)
Now scrapped way for UK individuals to invest a certain sum in equities each year without attracting income tax or capital gains tax. Replaced in 1999 by individual savings accounts (ISAs).
poison pill
Defensive tactics designed to fend off hostile takeovers.
portfolio
Collection of investments, normally consisting of shares, fixed interest stocks and cash. Good portfolios have an objective and the selection of investments is designed to achieve it. Concentrated/lop-sided portfolio is a portfolio containing only a few shares, or shares in the same industry.
pre-emptive rights
The right of existing shareholders to buy additional shares in a company through a new issue before it is offered to the public.
preference shares/preferred stock
Fixed dividend shares that rank above ordinary shares if a company is wound up.
pretax margin ratio
Measure of a company’s profitability. It shows pretax income (pretax profit) as a percentage of total revenue.
pretax profit
All income/loss before any taxes.
pretax/Recurring profit
A data item sometimes used in TED analysts' estimates data. Recurring indicates profit from continuing operations.
price/earnings ratio
A share’s price divided by its last published earnings. It is used as a measure of whether a company’s share should be considered expensive. Do not confuse with the yield, which is the dividend as a percentage of the share price. A prospective p/e ratio is based on the forecast of the next annual earnings to be published. A p/e is sometimes called a multiple.
prime rate
Interest rate charged by US banks on loans to their most creditworthy borrowers; the benchmark for other interest rates.
private placement
In the US is the sale of shares directly to an insti- tutional investor rather than placing them on the market. The shares need not be registered with the Securities and Exchange Commission.
profit
Excess of revenue over expenses relating to a particular period. Figures may be quoted as gross profit, net profit before tax, net profit after tax or earnings. Profit, trading profit and operating profit all refer to the profit before interest and tax.
programme trading
Batch of deals involving a number of different shares carried out simultaneously by a single stock market trader, who may either be acting for a client or have taken the programme on his own account. Many variations exist, including trading between stock index futures and equities and computer-triggered programme deals, which automatically buy or sell at preset prices.
protected funds
Funds with limited vulnerability to market setbacks.
public sector borrowing requirement (PSBR)
In the UK, the PSBR defines the amount that the public sector as a whole has to borrow in any financial year.
purchasing power parity
Method of valuation states that the correct exchange rate between two currencies is the one that equalises the price of the same traded item in both countries.
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