Income Bonds

Securities, the interest of which is payable only out of profit.

Indenture

A formal agreement between issuers of securities and bondholders (creditors) stating the terms and conditions of payment such as the interest rate, interest payment and maturity dates.

Index

Statistical data computed to measure changes in the value of commodities, securities, etc. An index is derived from the prices of all or some market constituents, usually expressed in percentage change from the base period. Indices are important measures of the performance of an economy or a financial market.

Initial Public Offering (IPO)

The first public offering of securities by a corporate entity.

Insider

Principal officers and directors of a company and those with business relationship with it such as auditors, reporting accountants and lawyers as well as those holding a specified percentage (in most countries 5 per cent or above) of the outstanding shares of a company.

Insider Dealing

Trading in the securities of a quoted company based on unpublished price-sensitive information of the company, to make a profit or minimize loss.

Institutional Investors

Institutions such as insurance companies, pension funds, investment trusts and unit trusts which, by virtue of their activities, pool substantial funds with a good percentage of the monies invested in the securities 'market. In some stock markets, over 50 per cent of equities is held by this class of investors while up to 70 per cent of trading is conducted on their behalf. They are, therefore, considered important players in stock markets.

Interest Payments made at regular intervals by issuers of debt securities and other borrowers to lenders (creditors) for parting with their funds.

Interim Dividend

Dividend declared and distributed by a company to its shareholders prior to the determination of final profit position for the financial year.

Internationalization

The opening up of a country's capital market to foreign participation by removal of entry and exit barriers, and permission to nationals to freely participate in foreign capital markets.

Investment Adviser

A market operator who, for compensation, engages in the business of advising others as to the value of securities or as to the advisability of investing in, purchasing or selling securities or who for compensation and as part of a regular business, issues and publishes analyses or reports concerning securities.

Investment Banker

A financial institution which performs a variety of capital market and corporate finance functions for clients. Such functions usually include assisting in raising capital, underwriting of securities, arranging mergers/acquisition activities, as well as reorganizing and restructuring corporate entities. An investment banker may also engage in brokerage services through its brokerage arm and deal for its own account.

Investment Company or Fund

A financial institution or fund whose business is to pool monies basically from small investors for a fee. The monies are then invested in securities and/or other instruments in line with the investment policy and objectives of the company/fund. Two types of investment company/fund exist: the open-end and the closed-end.

Investment In Securities

The purchase of financial assets e.g. stocks and bonds with the objective of enhancing income through returns such as dividends, intere5t and capital gains or, in some cases, with the objective of gaining a seat on the board or diversifying risk. 170 Investment Income Income such as dividend, interest and capital gains earned from investment in securities and other assets.

Investment Risk

The normal risk which is associated with investment in securities or any form of business venture. These include normal price fluctuations or busine5s vagaries.

Investor

A person (or institution) who buys and sells financial instruments with the aim of enhancing income and/or diversifying risk.

Investor Protection

Fund An insurance fund established to compensate clients of stockbroking firms and other capital market institutions which have collapsed or defaulted on their obligations. There is often a limit placed on the amount of compensation receivable by a client.

Irredeemable Debenture Stock

Interest bearing securities issued by corporate entities which cannot be redeemed until the instruments mature.

Issue

Securities of a company or government sold by way of a public offering or private placement at a given point in time.

Issued Capital

The portion of the authorized capital of a company which has actually been issued to subscribers (investors) which may or may not have been paid for. The issued capital may be equal to or less than the authorized capital but never greater than it. (see outstanding shares). 162 Issuer A company or government which makes an offering of securities to the public or a select group of investors.