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Deal flow |
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Deal flowIn investment banking, the rate at which new deals are referred to a brokerage firm.Deal flow Similar MatchesCanadian Dealing Network (CDN)Canadian Dealing Network (CDN)The organized OTC market of Canada. Formerly known as the Canadian Over-the-Counter Automated Trading System (COATS), the CDN became a subsidiary of the Toronto Stock Exchange in 1991. Directors dealingsDirectors dealingsThe purchases and sales made by directors of shares in the publicly quoted companies for which they work. It is perfectly legal for directors to buy or sell shares in their own company provided certain rules are observed. The most important rules are:directors are not allowed to use unpublished price sensitive information which they have got from their job to reach a decision about buying and selling shares (insider dealing)directors are not allowed to buy or sell shares in their company for two months before the announcement of results (the 'closed period')The process of tracking directors dealings has been standard practice for some time. It is becoming more and more accepted as a means for identifying stocks with substantial potential. Put crudely, if the directors are buying, they think the shares are undervalued; if they are selling, they think the shares are overvalued. Dealing costDealing costThe cost of trading in an asset or security which will vary according to the broker you use and according to the tax jurisdiction in which the trade is carried out.For UK stock market investors, the costs break down into:Broker commissionCommission is chargeable whether you buy or sell, and either takes the form of a flat fee (e.g. £12 per trade) or a commission on the value of the trade (e.g. 1.25% x £3,000 = £37.50). The actual figures will vary from broker to broker. Execution-only brokers are invariably cheaper than full-service brokers because they are not advising on what to buy or sell. They are just executing the trade.Stamp Duty0.5% tax, chargeable on purchases only (1% for Irish stocks) Paper dealerPaper dealerA brokerage firm that buys and sells commercial paper to make a profit. All paper dealAll paper dealWhen one listed company bids for another company (listed or private), and offers to pay in three ways:all cash: the shareholders of the target company get cash for their sharescash and paper: the shareholders of the target company get some cash for their shares, and some of the shares in the bidding companyall paper: the shareholders of the target company only get shares in the bidding company for their shares in the target companyObviously, the attraction of an all paper deal to shareholders in the target company will depend on how much confidence they have in the bidding company (do they want to own its shares?) and whether they think the relative valuations of the two companies' shares are fair.There can be some tax advantages to taking shares from a bidding company, rather than cash. The swap of shares is not deemed to be a disposal of the target company shares, so there is no immediate capital gains tax liability. If you take cash for your shares, it is a disposal, and there may be CGT to pay. Further SuggestionsdealDealer loan European Association of Securities Dealers Automated Quotation (EASDAQ) European Association of Securities Dealers Automated Quotation National Association of Securities Dealers insider dealing Trading desk (dealing desk) Deal stock Dealing desk (Trading desk) National Association of Securities Dealers Automatic Quotation System (Nasdaq) Broker dealer After hours dealing or trading Sticky deal Primary dealer after hours deals Foreign exchange dealer bought deal Dealers spread International Swap Dealers Association (ISDA) Cram down deal Bought deal Selected dealer agreement forward dealing Incestuous share dealing Odd lot dealer |
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