Guide to Analysing Companies

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INVESTMENT TRUST
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of the shares as well as those which are not, but should or could
be. Most publicly quoted companies prefer to have a stable and
diversified base of investors who, with luck, will hold their
shares as they grow in value. To this end consultants channel in-
formation to analysts and the media as well as investors to
ensure that a company’s business is well understood.
Investor relations was originally just a part of public rela-
tions. But as external shareholders have grown in importance
for most listed companies, so has the role of keeping them
happy, during tough times as well as good.
Invisibles
Traded items that never see the inside of a container for ship-
ping, but which earn foreign currency for their sponsor. Ser-
vices such as banking, insurance and tourism make up the
bulk of a country’s invisible trade. Some countries have a big
surplus in invisibles because they are especially attractive to
tourists or bankers, and sometimes to both. Increasingly, the dis-
tinction between visible and invisible trade is becoming blurred.
When Sony sells a (visible) mini-disc outside Japan, the price
paid for it includes a lot of (invisible) services such as patented
know-how, copyright and the like; and when tourists or bankers
leave the Bahamas, they will often take (visible) items home
with them.
IPO
See initial public offering.
IRA
See individual retirement account.
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IRA
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ISA
Short for individual savings account, a type of savings and in-
vestment account introduced by the UK government in 1999.
There are three main types of isas, holding a combination of
cash, equities and insurance. Gains made while invest-
ments remain within an isa are tax free. The government’s aim
was to build up individuals’ savings as part of its plan to free
more people from their dependence on state pensions. The
money flowed in during the boom years of the late 1990s, but
tailed off when equity markets faltered.
ISIN
Short for International Securities Identification Number, a 12-
digit alphanumeric code that uniquely identifies each issue of
securities. isin codes appear on every security and
coupon. Drawn up under the auspices of the International Or-
ganisation for Standardisation (iso), all such codes are pub-
lished under iso 6166.
Islamic banking
Banking run according to Islamic law. This forbids what is
known as 
riba, a term that encompasses not just the notion of
usury but also interest. As a result, Islamic banks do not
accept deposits on which they pay interest; instead they have