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01 / 10
What Is a Share Price?
📊
K25.00
Example share price
A share price is the amount of money an investor would need to pay
to buy one share of a company at a particular time, based on the
market price available at that time.
For example, if a company's share price is shown as K25,
one share is currently valued by the market at around K25.
The price does not stay the same forever. It can move up or down
as buyers and sellers trade the shares.
Simple meaning: Share price tells you the market price
of one share at a particular point in time.
02 / 10
Why Does a Share Have a Price?
A share represents a small ownership interest in a company.
Once shares are available for trading, investors may buy and sell them
in the market.
🏢
Company
→
📊
Shares
→
👥
Investors
The market price changes as investors place buy and sell orders.
The price reflects what buyers and sellers are willing to accept
at that time.
A share price is a market price. It is not a guarantee of what the
company is actually worth in every sense.
03 / 10
Share Prices Can Go Up
📈
K20 → K25
Price increased by K5
Suppose you bought a share at K20. Later, the market price rises
to K25.
The share price has increased by K5.
If you still own the share, its market value has increased by K5
per share compared with the earlier K20 price.
Simple Example
You own 100 shares.
Purchase price: K20 per share
Later market price: K25 per share
100 shares × K5 increase = K500 increase in
market value, before costs and taxes.
This does not automatically mean you have received K500 in cash.
The gain is generally realised when the investment is sold, subject
to the applicable circumstances and costs.
04 / 10
Share Prices Can Also Go Down
📉
K25 → K18
Price decreased by K7
Share prices do not only move upwards. They can also fall.
Imagine buying a share at K25 and later seeing the market price
at K18.
The market value has fallen by K7 per share.
Important: A falling share price does not automatically
mean the company is going out of business. Prices can move for many
different reasons.
This is why investors need to understand both potential returns
and potential losses before investing.
05 / 10
Buyers and Sellers Move the Price
The stock market is a marketplace where buyers and sellers meet.
If buyers are willing to pay higher prices and sellers accept those
prices, transactions can take place at higher prices.
If sellers are willing to accept lower prices and buyers are only
willing to pay lower prices, transactions can take place at lower prices.
Simple idea: Buying and selling activity helps determine
the market price of a share.
06 / 10
Why Can the Price Change?
Many things can influence the price investors are willing to pay
for a company's shares.
| Possible influence |
What it can mean |
| Company results |
Investors may reassess the company's future. |
| Dividends |
Dividend news can influence investor interest. |
| Company announcements |
New information can change expectations. |
| Economic conditions |
The wider economy can affect businesses. |
| Investor sentiment |
Confidence or fear can influence buying and selling. |
These are only some of the factors that can influence share prices.
There is not always one single reason for a price movement.
07 / 10
A Cheap Share Is Not Always a Cheap Company
K5
Share A
VS
K100
Share B
A beginner may see one share priced at K5 and another priced at K100
and think the K5 share is cheaper.
But that is not enough information to decide whether one company
is cheaper or more expensive relative to its business.
You also need to consider the number of shares the company has,
its profits, assets, debt, growth prospects and other factors.
Remember: Never judge a company only by looking
at the price of one share.
08 / 10
Share Price and Market Capitalisation
Market capitalisation gives you a broader picture of the market value
of a listed company's shares.
Simple Example
Suppose a company has:
1 million shares
and each share is priced at:
K10
A simple calculation gives:
1,000,000 × K10 = K10 million
This is why two companies with very different share prices can have
very different numbers of shares and still have different overall
market values.
Share price tells you the price of one share. Market capitalisation
looks at the value of the company's outstanding shares as a whole.
09 / 10
Do Not Panic When You See a Price Change
😟 → 📚 → 🧠
Price movement should make you ask questions, not immediately panic.
If you see a share price fall, do not immediately assume that something
terrible has happened.
Ask:
- What caused the price movement?
- Has the company released new information?
- Has the wider market changed?
- Has investor sentiment changed?
- Does the company's long-term situation remain the same?
Learning to investigate instead of reacting emotionally is an important
part of becoming a more informed investor.
Think first. Research the reason. Then make a decision.
10 / 10
🎓
Lesson Complete!
You now understand what a share price means and why it can move
up or down.
Remember these five points:
1. A share price is the market price of one share at a particular time.
2. Buyers and sellers help determine market prices.
3. Share prices can rise or fall.
4. A low share price does not automatically mean a company is cheap.
5. Share price is only one part of understanding an investment.
The most important habit is simple: do not look at a share
price alone. Learn about the company behind the share.
When you look at a stock market table, one of the first numbers you will notice is the share price. It may show a company trading at K5, K25, K100 or another amount. But what does that number actually mean?
A share price is the market price of one share at a particular point in time. It tells you what buyers and sellers are currently willing to pay and accept in the market. The price can change as trading takes place.
For example, imagine you buy a share at K20. If its market price later becomes K25, the market value of your share has increased by K5. But if the price falls to K15, its market value has decreased by K5. This is one of the most important things a new investor needs to understand: share prices can go both up and down.
However, there is another important lesson. A share priced at K5 is not automatically cheaper than a share priced at K100. The price of one share alone does not tell you whether a company is cheap, expensive, successful or risky.
In this lesson, you will learn what a share price means, how buyers and sellers influence prices, why prices change, and the difference between share price and the overall market value of a company.
By the end of the lesson, you should be able to look at a share price and understand what that number is telling you — and, just as importantly, what it is not telling you.
