iBoxx indices
iBoxx® indices represent the European bond markets. The real-time index family
comprises the iBoxx € liquid indices, the iBoxx € benchmark indices and the
iBoxx £ benchmark indices.
The
iBoxx € index family contains real-time indices for fixed-interest
government bonds (in euros or any currency of the Euro Zone), sub-sovereigns,
collateralized bonds and corporate bonds. Within the iBoxx € index family, the
iBoxx € benchmark indices enable market participants to evaluate the euro bond
markets. iBoxx £ index family represents the government bond market in British
pounds.
iBoxx € liquid indices comprise a selection of the most liquid bonds from the
iBoxx € benchmark indices. They are particularly suitable as a basis for OTC
and exchange-traded derivatives. Bond prices are supplied in real-time by ABN
AMRO, Barclays Capital, BNP Paribas, Deutsche Bank, Dresdner Kleinwort
Wasserstein, Morgan Stanley and UBS Warburg. An independent index provider,
Deutsche Börse consolidates those prices, calculating and distributing the
indices.
ifo Business Climate Index
The ifo Business Climate Index is one of the most important early indicators for the economic development in Germany. On a monthly basis, the Munich-based institute surveys some 7,000 companies on their evaluation of the economic situation and their expectations for the following six-month period.
The answers are weighted according to a complex formula and related to a basis of 100. That means: with an average neutral assessment of the business sentiment the index achieves 100 points; a worse assessment would result in a lower, and a better assessment would result in a higher figure.
The index is published on the last Tuesday of each month.
In the money
A warrant that is in the money has a positive intrinsic value.
Independent broker
Like exchange brokers, independent brokers arrange securities transactions between the banks that are represented on the stock exchange. In contrast to exchange brokers, however, they are only authorized to determine prices in the Regulated Market and in the Unofficial Market, and not in the Official Market. They can trade for their own account, although they usually liquidate their positions at the end of each trading session.
Independent brokers are admitted to trading by the exchange operating board. They must demonstrate that they are responsible and reliable, and that they possess the necessary aptitude for exchange trading.
Index
All indices calculated by Deutsche Börse:
stock indices and
bond indices .
Index certificate
With Index certificates investors can participate one-to-one in the development of an exchange index – without actually buying the underlying shares in that comprise that index. Every index certificate has a subscription rate (e.g., 1:10 or 1:100) that defines the value of the certificate in relation to the index listing. The investor invest broadly diversified and transparently with minimal effort and smaller amounts.
If the underlying share increases in value, the value of the certificate increases in analog to the gain; with every setback, the certificate value declines accordingly.
Investors should think about currency risks when investing in index certificates that track a share index outside of the euro zone. And they should pay attention to whether the underlying index is a performance or price index. With a performance index, all dividends and profits from subscription rights flow into the index value. In contrast to that, price indices show the pure development of the shares and thus the price declines that usually accompany dividend payouts.
Index certificates are particularly interesting to investors that want to profit from positive capital-market developments, but who don’t want to deal with the daily price developments of several individual shares.
Details about currently traded investment product types .
Indexfund
Like individual stocks, index funds can be traded on the exchange in
continuous trading.
The performance of an index fund generally matches that of the benchmark
index. Dividends are paid to the investor, and the administration costs of an
index fund are usually lower than those of an ordinary mutual fund. One
advantage of index funds is that they provide for greater diversification of
risk than investors can achieve by purchasing individual stocks. Unlike index
certificates, index funds do not have a maturity period, and thus there is no
risk to the issuer.
Market Overview
All Exchange-Traded Funds
Indicative price
The indicative price represents the median of the current estimate, which is
usually comprised of a bid and an ask quote. As a rule, investors buy at the
higher bid price and sell at the lower ask price. In no-spread trading on the
Frankfurt Stock Exchange, the lead brokers offer execution at the spread
median, the indicative price.
If the indicative price is not shown, the lead broker is in the progress of
determining the price. In this case, simply refresh the page.
These terms apply for all DAX® shares for an order volume up to €10,000. For
MDAX® shares, the order volume may be up to €5,000; orders in SDAX® and
TecDAX® titles may have a volume of up to €3,000. Usually, if the market
situation permits, the lead brokers may also execute larger orders at the
indicative price.
For titles with a price of less than €5, the indicative price, at which the
lead broker will try to execute, will be shown. However, these shares –
currently ten out of 160 – are not included in this voluntary commitment.
Estimates are published by the lead brokers in floor trading on the basis of
the current order situation and under consideration of the reference market.
For the 160 titles, this reference market is Xetra until 5.30 p.m. In evening
trading, the trading floor itself the market place with the largest turnover.
The estimate informs about the price level at which an exchange price could be
fixed. It is non-binding and does not present an offer to buy.
Individual custody
Securities held in individual custody are kept separate from those owned by the bank or by third parties. This form of custody is used if the securities in question are not admitted to collective custody by a securities clearing and deposit bank, or if the client requests it. The name of the owner is printed on a strip of paper which is wrapped around the securities to keep them together. The certificates and the coupon sheets are separated for security purposes. The client is responsible for any costs associated with this form of custody.
From the client's perspective, the advantage of individual custody is that he can receive the original shares he delivered to the bank. He retains ownership of his specific shares.
Regulations on individual custody are contained in the section 2 of the German Securities Deposit Law (effective on 4 February 1937) and in the terms and conditions of the bank groups.
Antonym: collective custody
Industry group
Companies listed in Prime Standard are sorted into industry groups by their core business fields. There are 62 industry groups in total, based on which companies are included in the 18 Prime Standard sector indices.
Initial Public Offering (IPO)
A company usually prepares and executes an IPO with the support of an issuing bank, or, in the case of large-scale issues, in conjunction with a syndicate.
Companies go public primarily as a means of raising additional equity capital and as an exit channel for the original capital providers (e.g., venture capital companies). Additional benefits of an IPO include a higher profile for the issuing company and a broader investor base. It is more advantageous for a company to go public during a bull market because this increases the likelihood that all new shares will be purchased, thereby lowering the cost of capital for the issuer.
Insider
According to sections 13 and 14 of the Securities Trading Act, enacted on 26 July 1994, insiders are persons who,
as members of the executive or supervisory bodies, or as personally liable partners of either the issuer or a company affiliated with the issuer;
as investors with an equity participation in the issuing company or a company affiliated with the issuer; or
owing to their profession, activities or tasks, have access to inside information.
Inside information is any knowledge pertaining to an issuer of insider securities, or to insider securities themselves, that has not been made public, and which could have a considerable impact on the price of the insider securities if it were publicly announced. Insiders who abuse this situation by trading on the basis of such knowledge create unfair advantages for themselves with respect to other market participants. For this reason, the Securities Trading Act provides for a ban on insider trading. A violation of this ban is punishable with a prison term of up to five years or a fine.
The Securities Trading Act differentiates between persons with direct access to inside information (primary insiders) and those who have acquired inside information indirectly (secondary insiders).
Exchange trading and OTC trading in insider securities is constantly monitored by the Federal Supervisory Office for Securities Trading (BAFin).
Intra-Day-Handel
In intraday trading, securities are bought and sold within the same trading
day, in some cases even several times during the day. Day traders try to spot
day trends and use price volatilities for their profit. They rarely keep a
position over night.
Intrinsic value
The warrant premium is the sum of two values: the intrinsic value and the time value. On the expiry date, the time value is zero, and thus the value of the warrant is equal to its intrinsic value.
The intrinsic value is calculated by subtracting the exercise price from the current price of the underlying security and multiplying the result by the exercise ratio.
Investment fund
Funds pool the assets of many investors and invest them in stocks, bonds, and other instruments, which enables investors to invest in a wide variety instruments with a small amount of money. Distributing risk among many different instruments reduces the overall risk for investors. Funds are the investment of choice for investors who do not want the burden of constantly monitoring their investments, and who prefer to leave the task of tracking and analyzing the market to professionals.
A fund is managed by an investment company. The fund's assets are kept in custody at a depositary bank. Investors can buy or sell shares through the investment company itself or on the stock exchange. In most cases, the shares carry a load to cover marketing costs. Income in the form of dividends or interest is either paid out to the shareholder or reinvested.
The value of a share is calculated by dividing the fund's total assets by the number of outstanding shares. If the value of the investments held by the fund increases, the fund's total assets increase, and in turn, the value of the shares goes up.
Two categories of funds, retail funds and special funds, are each geared to a different group of investors. A further distinction is made between open-end and closed-end funds; a closed-end fund issues a fixed number of shares.
Investment trust
Investment trusts are closed-end funds, and thus issue a limited number of shares. Once this number has been reached, the fund is closed. The investment company is not obligated to buy back shares, although investors can sell their shares on the stock exchange if the investment company refuses to redeem them. Closed-end funds are especially popular in the US and the UK.
Synonym: Closed-end fund
Investor relations
Investor relations (IR) provides current and potential shareholders with information about a company. The goal of IR is to promote long-term ties between shareholder and company via measures such as road shows, analysts' conferences, shareholder newsletters, the presentation of the financial statements, ad campaigns, company brochures, etc.
IPO
Abkürzung für: Initial Public Offering; erstmaliges öffentliches Angebot von Wertpapieren eines Unternehmens.
ISIN
Acronym for International Security Identification Number
The ISIN is the international standard used for the identification of
securities. It consists of a two-digit code (e.g. DE for Germany) which is
followed by a ten-digit alphanumerical code.
ISM Index
The American early indicator is based on a monthly survey among purchasing managers from 350 companies in 20 representative US industry sectors. Thereby, the purchasing managers evaluate their current and future economic situation.
The Purchasing Managers’ Index for the manufacturing sector has been calculated for more than 80 years. The Institute for Supply Management (ISM), which is responsible for the compilation and publication of the index, comprises 180 sub-institutions and has more than 45,000 members.
Since May 2001, the ISM Purchasing Managers’ Index has also considered services alongside the supply of goods. Today it comprises the sub-areas: incoming orders (30 percent), production (25 percent), employment (20 percent), delivery times (15 percent) and stock (10 percent).
For the calculation of the index, the sentiment among each sub-area is regarded in comparison to the previous month. All sectors that were able to post an increase and half of the unchanged values are added up. Thereby, a total value of above 50 points towards an expansion in the manufacturing industry, while a value below 50 indicates a downturn. An index level of 50 means a zero-growth rate and any value below 40 indicates a recession.
This indicator is published on the first working day of each month.
Issue
An issue is typically effected via an underwriting syndicate, although some companies also opt for a direct offering.
The advantage of issuing securities with the support of a syndicate is that the issuer can utilize the syndicate bank's existing business connections to the investing public and its extensive sales system for placing the securities. As a rule, the syndicate purchases the entire issue from the issuer at the underwriting price and re-sells the securities to investors at a slightly higher price, also called the offering price. In doing so, the syndicate assumes the risk associated with the placement of the securities.
The underwriting method is especially suited for large-scale international issues. Recently, global issuing syndicates have begun to form to handle the worldwide placement of securities (e.g., the offering of shares by Deutsche Telekom AG); these syndicates have regional sub-syndicates (e.g., for the regions of Europe, North and South America and Asia).
Issuer
Stocks are typically issued by stock corporations, while bonds can be issued by both private-sector companies and entities under public law. For example, the Federal Republic of Germany is an issuer of federal government bonds.
Some companies or entities, such as the public authorities or real-estate credit institutions, issue securities on an ongoing basis; they are referred to as tap issuers.
Issuing price
In recent years, the bookbuilding method has become a widely used procedure for determining issuing prices.
