Capital market trading

Invest in securities traded on the Prague Stock Exchange and other global stock exchanges

Investment in securities

Generate high returns during market conjuncture

Online submission of instructions to the Prague Stock and foreign exchanges

Telephonic submission of instructions
via dealing KB

Online overview of the entire portfolio

More information

You pay no fee for submitting an order to buy or sell shares online and for managing your portfolio
You will receive a monthly or quarterly statement from your portfolio account

We will automatically credit the paid dividends to your portfolio account
You pay the bank a fee for managing the securities in your portfolio

About Capital Market Trading

Possibility to purchase and sell shares, bonds, and other instruments on international markets (including the Prague Stock Exchange)
You can submit instructions for trades to the Prague Stock and foreign exchanges via Online Portfolio
The application also allows online currency conversion of the most commonly used currencies
The possibility of telefonic submission of instructions via dealing KB
Shares are securities that are associated with shareholders’ rights to take part in the company management, profits, and liquidation balance (company dissolution)
Bonds are securities that are associated with their holders’ right to request repayment of outstanding amount (nominal amount) and regular payment of returns accrued as of specific dates
Bonds include government and municipal bonds, with fixed, variable or zero interest rate (zero-coupon)
Each month or quarter, you will receive your portfolio account statement, with detailed description of financial funds/securities balances – this statement also provides an overview of all financial transactions taking place within sub-accounts
You can specify a price limit, at which requested transactions are to be executed
No fees charged by KB for submitted share purchase/sale orders and/or portfolio management
Fee charged for the administration of securities in your portfolio
Administration services also include automatic payment of dividends to your portfolio account and other capital transactions free of charge
Dividends paid out in foreign currencies are credited to your portfolio account in foreign currency as well

Risks

There are many risks associated with capital market trading that may impair investments.

Risks associated with shares:

Company (issuer) risk

Each buyer becomes a company shareholder, thereby taking part in its development and any profit or loss. All risks are usually reflected in the current market value – the returns on such investments are thus difficult to predict. In extreme cases, the given company may even go bankrupt and the entire investment may be lost.

Price risk

Prices of shares may be subject to unpredictable fluctuations, resulting in potential losses. Prices go up and down in the course of medium-term and long-term cycles, without any way of determining the duration of such cycles. This is general market risk, associated with market sentiments, global political situation and situation prevailing in the financial markets. This risk must be distinguished from risks specific to a company.

Dividend payment risk

Dividend per share mainly depends on revenue of the issuing company as well as its dividend policy and development plan. In case of low profits, dividend revenue may be reduced or not paid out at all.

Currency risk

Investments in shares denominated in foreign currencies are also associated with currency risk. Investments may not be profitable in CZK equivalent, in spite of increasing market prices of share.

Risks associated with bonds:

Interest rate risk

Interest rates and bond prices carry an inverse relationship. As interest rates fall, the price of bonds generally rises and, conversely, when interest rates rise, bond prices tend to fall. Uncertainty relating to interest rate changes means that investments in fixed-rate securities are associated with the risk of declining prices of such securities, when interest rates rise. The longer the maturity and the lower the interest rate, the higher the bond sensitivity to rising market rates.

Inflation risk

Investors buying bonds essentially commit to receiving a rate of return, either fixed or variable, for the duration of the bond or at least as long as it is held. In case inflation increases dramatically, and at a faster rate than investment income, investors may actually achieve a negative rate of return.

Credit risk

Investors must consider the possibility of bond issuer’s temporary or permanent default, not being able to repay the coupon or principal in time. In their investment decisions, clients must factor in the possibility that corporate and municipal bonds are not guaranteed and that they may lose their initial investments, either in part or in full.

Rating downgrade risk

Issuers’ ratings are published by ratings institutions. They assess company’s ability to manage and repay its debt. If a company's credit rating is low or its ability to repay is questioned, banks and lending institutions may charge the company a higher interest rate for future loans. This further impairs the company's ability to satisfy its debts, prices of existing bonds decline, and existing bondholders incur losses when selling their bonds.

Liquidity risk

Government bonds usually do not have any problems with market liquidity. However, the situation may be quite different for other types of bonds. Bonds traded on a thin market may be sold at lower prices than those expected by investors on the basis of standard reports.

Prepayment risk

In its prospectus, an issuer may reserve the right to bond prepayment (call option), usually exercised in case of declining market interest rates. Therefore, investors may not generate expected returns to maturity.

Currency risk

Investments in bonds denominated in foreign currencies are also associated with currency risk. Investments may not be profitable in CZK equivalent, even if an investor holds the given instrument to maturity.