Technical Terms (Source: Investopedia)

Companies that are less than 50% owned by a parent company; the parents are minority shareholders. More loosely, the term "affiliated companies" is sometimes used to refer to companies that are related to each other in some way. By way of contrast, a subsidiary is more than 50% owned by its parent; the parent is a majority shareholder.
A generic term for an institutional investor. Through their portfolio managers, asset managers often manage collective investment schemes and invest across a spectrum of assets (equities or fixed income securities or commodities or real estate). When asset managers have a mandate to make investment decisions on behalf of their clients, they manage funds on a discretionary basis.
An unbiased examination and evaluation of the financial statements of an organization. It can be done internally (by employees of the organization) or externally (by an outside firm). Auditors ensure the fiscal accuracy and responsibility of organizations.
A Committee set up by the board of directors of a company tasked with oversight of financial reporting and disclosure. It is generally solely or mostly composed of independent, non-executive directors.
A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders.
The balance sheet must follow the following formula:
Assets = Liabilities + Shareholders' Equity
1. The value at which an asset is carried on a balance sheet. To calculate, take the cost of an asset minus the accumulated depreciation. Book value is the accounting value of a firm. It has two main uses:
1. It is the total value of the company's assets that shareholders would theoretically receive if a company were liquidated.
2. By being compared to the company's market value, the book value can indicate whether a stock is under- or overpriced.
The due diligence conducted by investment banks and legal advisers, usually by way of interviews with management, into the affairs of a company preparing for listing. Business due diligence focuses on the business of the company and serves to accurately describe it in the offering circular. Business due diligence also includes site visits and is supplemented by documentary and financial due diligence.
An increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold. A capital gain may be short term (one year or less) or long term (more than one year) and must be claimed on income taxes. A capital loss is incurred when there is a decrease in the capital asset value compared to an asset's purchase price.
The proportion between equity and debt capital on the balance sheet of a company.
A letter given to organizations or persons of interest by external auditors regarding statutory audits, statements and reports used in a prospectus. The comfort letter will be attached to the preliminary statements as assurance that it will not be materially different from the final version.
Comfort letters can be used by underwriters as their obligation to carry out "reasonable investigation" into offerings of securities. These letters of comfort will ensure that the reports provided conform to the generally accepted accounting principles (GAAP). This helps the underwriter better understand aspects of the financial data which might not otherwise be reported such as changes to financial statements and unaudited financial reports.
A listed company against which an issuer is benchmarked in an IPO to assess its performance, business and, ultimately, valuation.
The combined financial statements of a parent company and its subsidiaries. Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge the overall health of an entire group of companies as opposed to one company's stand alone position.
The system of rules, practices and processes by which a company is directed and controlled. Corporate governance essentially involves balancing the interests of the many stakeholders in a company - these include its shareholders, management, customers, suppliers, financiers, government and the community. Since corporate governance also provides the framework for attaining a company's objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure.
Most companies strive to have a high level of corporate governance. These days, it is not enough for a company to merely be profitable; it also needs to demonstrate good corporate citizenship through environmental awareness, ethical behavior and sound corporate governance practices.
In 1993 under the Ministry of National Planning and Economic Development, Directorate of Investment and Company Administration (DICA) was formed. Major functions of Directorate of Investment and Company Administration are scrutinizing and appraisal of projects that are proposed for investment in the Republic of the Union of Myanmar, monitoring and reporting the implementation of permitted enterprises, registration and administration of Limited Companies, Joint Ventures, Partnerships and Association and Association and taking part in regional cooperation relating to investment matters.

Objectives of Directorate of Investment and Company Administration
 - To increase investments (local investment & foreign investment)
 - To encourage private entrepreneurship
 - To take part in regional and international economic cooperation
A reduction in the value of a shareholding that occurs when new shares are issued by a company. Investors in an IPO experience immediate dilution if new shares are issued above the net asset value of the company.
In the context of an IPO, a statement included in the inside cover of a pre-deal research report to bring investors’ attention to the fact that the report has been drafted independently of the company and cannot be relied upon to purchase shares in the IPO. Disclaimers are also included on the front cover of, and within, prospectuses to warn potential investors about certain facts about the company or market in the shares.
The act of releasing all relevant information pertaining to a company that may influence an investment decision. In order to be listed on stock exchanges, companies must follow all of the Securities and Exchange Commission's and stock exchange's disclosure requirements and regulations.
To make investing as fair as possible for everyone, companies must disclose both good and bad information. In the past, selective disclosure was a serious problem for investors because insiders would frequently take advantage of information for their own gain - at the expense of the general investing public.
Companies are not the only entities that are subject to strict disclosure regulations. By law, brokerage firms and analysts must also disclose any sort of information that they have that relates to investment decisions. For example, in order to limit conflict of interest issues, analysts must disclose any equities that they own.
A theoretical valuation methodology most appropriate for businesses with good, long-term visibility and predictable cash-flows. The value of a company calculated using a DCF valuation varies greatly depending on the assumptions used. A DCF valuation determines the value of a business using expected future cash flows, discounted at a rate that reflects the riskiness of such cash flows. This involves discounting the cash flows at a weighted average cost of capital (WACC) taking into account the company’s capital structure, i.e. the proportion between debt and equity capital, where such equity and debt are currently priced, how much of the debt is currently outstanding, and the company’s tax rate.
A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. When a corporation earns a profit or surplus, it can either re-invest it in the business (called retained earnings), or it can distribute it to shareholders. A corporation may retain a portion of its earnings and pay the remainder as a dividend.
The dividend is most often quoted in terms of the dollar amount each share receives (dividends per share). It can also be quoted in terms of a percent of the current market price, referred to as dividend yield.
A listing by a company on two separate stock exchanges where the initial listing on the home market is usually referred to as the primary listing or home market while the other is referred to as the secondary listing.
The process through which the parties involved in the execution of an IPO investigate the affairs of a company, so as to satisfy themselves with the adequacy of the business, financial and legal aspects of the issuer and to ensure that all the necessary material information required by a reasonable investor to invest in the IPO has not only been accurately included in the prospectus, but also not been omitted. Due diligence usually takes the form of business due diligence (including site visits, where appropriate), financial due diligence and documentary due diligence. Conducting appropriate due diligence provides the basis for due diligence defense against prospectus liability.
An indicator of a company's profitability, calculated as revenue minus expenses, excluding tax and interest. EBIT is also referred to as "operating earnings", "operating profit" and "operating income", as you can re-arrange the formula to be calculated as follows:
EBIT = Revenue-COGS-Operating Expenses

EBIT equals Net Income with interest and taxes added back to it.
In other words, EBIT is all profits before taking into account interest payments and income taxes. An important factor contributing to the widespread use of EBIT is the way in which it nulls the effects of the different capital structures and tax rates used by different companies. By excluding both taxes and interest expenses, the figure hones in on the company's ability to profit and thus makes for easier cross-company comparisons.
The key attributes of a company, as marketed to investors in an IPO.
An equity capital markets transaction conducted after a company has become listed for the first time in an IPO.
A measure of financial performance calculated as operating cash flow minus capital expenditures. Free cash flow (FCF) represents the cash that a company is able to generate after laying out the money required to maintain or expand its asset base. Free cash flow is important because it allows a company to pursue opportunities that enhance shareholder value. Without cash, it's tough to develop new products, make acquisitions, pay dividends and reduce debt. FCF is calculated as: EBIT(1-Tax Rate) + Depreciation & Amortization - Change in Net Working Capital - Capital Expenditure. It can also be calculated by taking operating cash flow and subtracting capital expenditures.
A parent corporation, limited liability company or limited partnership that owns enough voting stock in another company to control its policies and management. A holding company exists for the sole purpose of controlling another company, which might also be a corporation, limited partnership or limited liability company, rather than for the purpose of producing its own goods or services. Holding companies also exist for the purpose of owning property such as real estate, patents, trademarks, stocks and other assets. If a business is 100% owned by a holding company, it is called a wholly owned subsidiary.
A financial statement that measures a company's financial performance over a specific accounting period. Financial performance is assessed by giving a summary of how the business incurs its revenues and expenses through both operating and non-operating activities. It also shows the net profit or loss incurred over a specific accounting period, typically over a fiscal quarter or year. Also known as the "profit and loss statement" or "statement of revenue and expense."
Methods put in place by a company to ensure the integrity of financial and accounting information, meet operational and profitability targets and transmit management policies throughout the organization. Internal controls work best when they are applied to multiple divisions and deal with the interactions between the various business departments. No two systems of internal controls are identical, but many core philosophies regarding financial integrity and accounting practices have become standard management practices.
The buying or selling of a securities by someone who has access to material, nonpublic information about the securities.
Insider trading can be illegal or legal depending on when the insider makes the trade: it is illegal when the material information is still nonpublic--trading while having special knowledge is unfair to other investors who don't have access to such knowledge. Illegal insider trading therefore includes tipping others when you have any sort of nonpublic information. Directors are not the only ones who have the potential to be convicted of insider trading. People such as brokers and even family members can be guilty.
Insider trading is legal once the material information has been made public, at which time the insider has no direct advantage over other investors. The SECM, however, still requires all insiders to report all their transactions. So, as insiders have an insight into the workings of their company, it may be wise for an investor to look at these reports to see how insiders are legally trading their stock.
Investors that manage money on behalf of other parties, for example sovereign wealth funds, asset managers, mutual funds, charities, insurance companies, banks, pension funds or hedge funds.
1. The degree to which an asset or securities can be bought or sold in the market without affecting the asset's price. Liquidity is characterized by a high level of trading activity. Assets that can be easily bought or sold are known as liquid assets.
2. The ability to convert an asset to cash quickly. Also known as "marketability."
There is no specific liquidity formula; however, liquidity is often calculated by using liquidity ratios.
It is safer to invest in liquid assets than illiquid ones because it is easier for an investor to get his/her money out of the investment.
Generally, an all-parties meeting held with the issuer at the outset of an IPO to introduce the working teams to each other and to communicate the key parameters of the transaction.
Market capitalization is the aggregate valuation of the company based on its current share price and the total number of outstanding stocks. It is calculated by multiplying the current market price of the company's share with the total outstanding shares of the company.
For instance, a company has 20 million outstanding shares and the current market price of each share is 10 MMK. Market capitalization of this company will be 20,000,000 x 10=200 million MMK.
When investor demand that has been generated for an IPO exceeds the number of shares available for sale or issue.
A ratio used to compare a stock's market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share. Also known as the "price-equity ratio". Calculated as: P/B Ratio= Stock Price/ Total Assets-Intangible Assets and Liabilities. A lower P/B ratio could mean that the stock is undervalued. However, it could also mean that something is fundamentally wrong with the company. As with most ratios, be aware that this varies by industry. This ratio also gives some idea of whether you're paying too much for what would be left if the company went bankrupt immediately.
A valuation ratio of a company's current share price compared to its per-share earnings. Calculated as:
Market Value per Share / Earnings per Share (EPS) For example, if a company is currently trading at $43 a share and earnings over the last 12 months were $1.95 per share, the P/E ratio for the stock would be 22.05 ($43/$1.95). EPS is usually from the last four quarters (trailing P/E), but sometimes it can be taken from the estimates of earnings expected in the next four quarters (projected or forward P/E). A third variation uses the sum of the last two actual quarters and the estimates of the next two quarters. Also sometimes known as "price multiple" or "earnings multiple." In general, a high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. However, the P/E ratio doesn't tell us the whole story by itself. It's usually more useful to compare the P/E ratios of one company to other companies in the same industry, to the market in general or against the company's own historical P/E. It would not be useful for investors using the P/E ratio as a basis for their investment to compare the P/E of a technology company (high P/E) to a utility company (low P/E) as each industry has much different growth prospects.
A market that issues new securities on an exchange. Companies, governments and other groups obtain financing through debt or equity based securities. Primary markets are facilitated by underwriting groups, which consist of investment banks that will set a beginning price range for a given securities and then oversee its sale directly to investors.
Also known as "new issue market" (NIM). The primary markets are where investors can get first crack at new securities issuance. The issuing company or group receives cash proceeds from the sale, which is then used to fund operations or expand the business. Exchanges have varying levels of requirements which must be met before securities can be sold.
Once the initial sale is complete, further trading is said to conduct on the secondary market, which is where the bulk of exchange trading occurs each day. Primary markets can see increased volatility over secondary markets because it is difficult to accurately gauge investor demand for new securities until several days of trading have occurred.
A placement to institutional investors, or certain types of institutional investors only, pursuant to an exemption from registration requirements.
A Latin term meaning "for the sake of form". In the investing world, it describes a method of calculating financial results in order to emphasize either current or projected figures.
Pro forma financial statements could be designed to reflect a proposed change, such as a merger or acquisition, or to emphasize certain figures when a company issues an earnings announcement to the public.
Investors should be careful when reading a company's pro-forma financial statements, as the figures may not comply with generally accepted accounting principles (GAAP). In some cases, the pro-forma figures may differ greatly from the those derived from GAAP.
A formal legal document, which is required by and filed with the Securities and Exchange Commission that provides details about an investment offering for sale to the public according to Securities Exchange Law Article 35 prospectus needs to be filed to SECM. A prospectus should contain the facts that an investor needs to make an informed investment decision.
Also known as an "offer document."
There are two types of prospectuses for stocks and bonds: preliminary and final. The preliminary prospectus is the first offering document provided by a securities issuer and includes most of the details of the business and transaction in question. The final prospectus is printed after the deal has been made effective and can be offered for sale, and supersedes the preliminary prospectus. It contains finalized background information including such details as the exact number of shares/certificates issued and the precise offering price.
The writing of a prospectus by legal advisors, investment banks and other parties. Traditionally, the first draft of a prospectus for an international IPO is produced by the legal advisers to the issuer.
A business deal or arrangement between two parties who are joined by a special relationship prior to the deal. For example, a business transaction between a major shareholder and the corporation, such as a contract for the shareholder's company to perform renovations to the corporation's offices, would be deemed a related-party transaction.
Listed companies are required to disclose all transactions with related parties such as executives, associates and their family members in their prospectus and annual report. While the great majority of related-party transactions are perfectly normal, the special relationship inherent between the involved parties creates potential conflicts of interest which can result in actions which benefit the people involved as opposed to the shareholders.
The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. ROE is expressed as a percentage and calculated as:
Return on Equity = Net Income/Shareholder's Equity
Net income is for the full fiscal year
A market where investors purchase securities or assets from other investors, rather than from issuing companies themselves.
A newly issued IPO will be considered a primary market trade when the shares are first purchased by investors directly from the underwriting investment bank; after that any shares traded will be on the secondary market, between investors themselves. In the primary market prices are often set beforehand, whereas in the secondary market only basic forces like supply and demand determine the price of the securities.
Securities and Exchange Commission of Myanmar. A regulatory body that oversees YSX and securities companies.
Article 4(a) of Securities Exchange Law allows the formation of the Commission comprising a minimum of five suitable persons. SECM is the regulatory authority to oversee and regulate the securities market.
The Securities Exchange Law awarded Commission the authority to:
 -Grant issuance of license and permit
 -Grant the submission for appointing the auditor of the securities company and of the Stock Exchange
 -Grant the constitution of the Stock Exchange
 -Advise in respect of matters relating to the securities business to the Union Government
 -Supervise the securities business and make relevant inquiries and investigations from time to time
A financial instrument that represents: an ownership position in a publicly-traded corporation (stock), a creditor relationship with governmental body or a corporation (bond), or rights to ownership as represented by an option. Securities are fungible, negotiable financial instruments that represent some type of financial value. The company or entity that issues the security is known as the issuer.
Securities are typically divided into debt securities and equities. A debt security is a type of security that represents money that is borrowed that must be repaid, with terms that define the amount borrowed, interest rate and maturity/renewal date.
Equities represent ownership interest held by shareholders in a corporation, such as a stock. Unlike holders of debt securities who generally receive only interest and the repayment of the principal, holders of equity securities are able to profit from capital gains.
The breakdown of the turnover, earnings or assets of a company into several segments. Segmentation can be conducted on a geographical basis or pursuant to several lines of activities undertaken by the company. The segmentation of accounts provides investors with better visibility with respect to the financial performance of the company but is sometimes frowned upon by issuers as it can provide competitors with sensitive information or a competitive edge.
A short alphanumerical identifier for a listed stock.
A situation where demand generated from investors is below the number of shares offered in an IPO.
The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt).
The word "underwriter" is said to have come from the practice of having each risk-taker write his or her name under the total amount of risk that he or she was willing to accept at a specified premium. In a way, this is still true today, as new issues are usually brought to market by an underwriting syndicate in which each firm takes the responsibility (and risk) of selling its specific allotment.
In Finance, it is the process of estimating what something is worth. Items that are usually valued are a financial asset or liability. Valuations can be done on assets (for example, investments in marketable securities such as stocks, options, business enterprises, or intangible assets such as patents and trademarks) or on liabilities (e.g., bonds issued by a company). Valuations are needed for many reasons such as investment analysis, capital budgeting, merger and acquisition transactions, financial reporting, taxable events to determine the proper tax liability, and in litigation.
Valuation of financial assets is done using one or more of these types of models:
1. Absolute value models that determine the present value of an asset's expected future cash flows. These kinds of models take two general forms: multi-period models such as discounted cash flow models or single-period models such as the Gordon model. These models rely on mathematics rather than price observation.
2. Relative value models determine value based on the observation of market prices of similar assets.

TVP Group is a local firm that provides highest standard financial advisory services to both Myanmar companies and MNCs. With our diverse corporate network, we support our clients on group structuring, valuation, M&A, Joint Venture structuring and research, while offering a fair pricing.

Business Hours

Contact us