Guide to Analysing Companies
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FINANCE Essencial finance
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- Drawdown Making use of funds that have been made available under a bank facility. Dual capacity
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112 DOTCOM STOCKS 01 Essential Finance 10/11/06 2:21 PM Page 112 the so-called Global Titans, companies big enough to stand out internationally, a Composite Average and indexes covering sectors such as transport and utilities. This is just the tip of the iceberg. In all, Dow Jones licenses around 3,000 indexes used by investors for different products and in different markets around the world. In a joint venture with the Deutsche börse, euronext Paris and the Swiss Exchange, the company also calculates the stoxx series of indexes of European companies in dollars and euros. These are calculated on the same basis as the Dow Jones Global Indexes, so that investors can compare one with another. Downgrade A reduction in the rating of a company or of its debt securi- ties. Companies whose ratings are reduced to the point where they are no longer investment grade, and whose bonds therefore become junk bonds, are known as fallen angels. Drawdown Making use of funds that have been made available under a bank facility. Dual capacity The ability of the same financial institution to be both stock- broker (that is agent) and stock jobber or market maker (that is principal). (See also big bang.) In any business, being both agent and principal inevitably leads to potential con- flicts of interest. In stockbroking, for example, it presents opportunities to put good deals (retrospectively) on a company’s own books and bad deals on the books of clients. D DUAL CAPACITY 113 01 Essential Finance 10/11/06 2:21 PM Page 113 |
