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What is A Stock?
A stock represents part ownership of a company. A company is
collectively owned by its stockholders. Therefore, if you
own 1000 shares in a company that has a capital base of
1,000,000 shares issued and fully paid, then you own one
thousandth (1/1000) of the entire company. If you owned
500,000 shares then half of the company belongs to you.
How Do I Buy Stocks?
Once you determine which company or companies you would like
to have a part ownership in, you simply get in touch with
your stockbroker (like CMMB Securities and Asset Management)
to place your order. If you are not certain, please come in
and our stockbroker will help you decide which companies
stocks may better suit your investment objectives.
You will need to provide the stockbroker with certain
information (your name, mailing address, ID#, telephone
contact etc.) because an account has to be opened for you
before any business can be transacted on your behalf. After
the account is opened, you can begin to place your orders.
Types of Orders
There are two (2) types of orders you can place:
- A Market Order, which means you want your
stockbroker to buy or sell the shares at the best
possible price
- A Limit Order, which restricts your stockbroker to
purchasing or selling the shares for you up to a certain
price determined by you.
How Do I Sell Stocks?
You can sell stocks by opening an account with your
stockbroker and placing any one of the two (2) types of
orders. Before a stock can be sold on the Trinidad & Tobago
Stock Exchange, share certificates must be lodged through
your broker with the Trinidad & Tobago Central Depository.
To achieve this, simply bring in your original stock
certificates along with a signed stock transfer form in
order to facilitate the smooth transfer of the shares to the
depository.
What Stocks Can I Buy or Sell?
The stocks of all the companies listed on the Stock Exchange
can be bought and/or sold. To date there are 34 companies
listed on the Stock Exchange.
What Is A Stock Exchange?
A Stock Exchange is a centralized market place for the
buying and selling of shares. The stockbrokers who buy and
sell on your behalf are called members of the Stock
Exchange. They are the only ones authorized to transact
business on the Stock Exchange. Trading on the Trinidad and
Tobago Stock Exchange takes place on a daily basis, from
9:30am to 12 noon.
What
are the trading days?
Trading on the Trinidad and Tobago Stock Exchange (TTSE) occurs
Monday through Friday from 9:30 am to 12:00 noon; trading on
the Barbados Stock Exchange (BSE) occurs Monday to Friday
from 10:00am to 1:00pm; trading on the Jamaica Stock
Exchange (JSE) occurs Monday through Friday from 9:30am to
1:30pm; and trading on the Eastern Caribbean Stock Exchange
(ECSE) occurs from Monday to Friday between 9:00am and
2:00pm.
When do I pay for purchased
shares?
When you place a purchase order for shares
on the TTSE, you must have the required funds in your CMMB
Money Market Account before the trade is executed. If the
stock prices move after a "market" order is placed,
outstanding balances must be deposited into your CMMB
account before 11:00am on settlement day. Transactions on
the TTSE, BSE and JSE are settled 3 working days after
execution.
How Are Transactions Settled?
When you place a purchase order for shares on the TTSE, you
must have the required funds in your CMMB Money Market
Account before the trade is executed. If the stock prices
move after a "market" order is placed, outstanding balances
must be deposited into your CMMB account before 11:00am on
settlement day. Transactions on the TTSE, BSE and JSE are
settled 3 working days after execution.
How Are Prices Determined?
The price of a stock depends on a number of factors
including demand/supply conditions in the market for that
particular stock. Heavy demand will more than likely push
the price upward. On the other hand, if there are many
sellers of a particular stock then the likelihood is that
the stock price will decline. Supply/demand conditions can
change suddenly. A company’s results may be exceptionally
good or bad. Or there may be some bit of news, which may
bode well for a particular company that generates new demand
for its stock. That is why stock markets are sometimes
volatile and that is why any investor or prospective
investor has to determine what level of risk he or she is
prepared to assume because every investment carries an
attendant risk.
Are there any service charges?
Your stockbroker charges a fee called a commission, each
time you buy or sell a stock for the services the firm
provides. When you buy you pay your broker for the value of
the stock plus the commission and other charges. When you
sell your stock, you receive the value of the stock less the
commission and other charges.
The normal commissions charged to clients of CMMB Securities
for trades on the TTSE are as follows:
A flat fee of 1.25% of the total value of the transaction.
(There is a minimum commission charged of TT$15.00)
There is also a Stock Exchange transaction charge of 0.15%
(minimum $1.00) and a stamp duty charge of 25 cents.
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