Investment Banks

Lexical Field Invested (pp)

Investment (N.) Investing (pp)

Invest
(V.)
Investible (adj)

Investor (N.)

Investable (adj)
Investment

a. The action or process of using money in order to make a profit or earn interest, for example by buying shares, bonds,
property (Am. Eng./ real estate (Brit. Eng.), etc..

b. The amount of money that a person or a business invests.

c. The thing that a person or business invests in
d. The act or process of buying materials, machines, etc., to make goods to sell,
e.g. Industrial/ infrastructure/ technology investment.
Heavy/major/new investment.
To Invest:
a. to buy property, shares/stocks, etc., in order to sell them again and make a profit.
b. (about a company, a government, etc., to spend money on sth so as to make it better or more successful.
c. (+ obj.) to save money in a bank account, an insurance policy to receive interest.
 Useful Vocabulary items to describe investments

A Good Investment A Bad Investment A + period + Investment

• Low-risk • High-risk • Short-term
• Safe • Risky • Long-term
• Risk-free • Speculative • Medium-term/
• Profitable • Unprofitable • Mid-term
 Useful Vocabulary items to describe investments

Profitable Investment Unprofitable Investment

• Rewarding • Valueless
• Productive • Unremunerative
• Lucrative • Useless
• Fruitful • Unproductive
• Cost-effective • Unfruitful
• Beneficial • Fruitless
• Worthwhile • Profitless
• Useful • Worthless
• successful • Nonprofit
• Unlucrative
 Investment Banks

An investment is an asset that is purchased hoping that it will generate income or appreciate in the future –
and will later be sold at a higher price for a profit.

Definition :

• Unlike Commercial/Retail banks which take deposits and deal with personal customers, an Investment Bank (IB, for short)
is a financial services company or corporate division that engages in advisory-based financial transactions on the behalf of
investors, corporates and governments.

• IBs deal with corporate customers and act as intermediaries between security issuers and investors.
 Role & Functions of IBs :
Investment Banks serve many different purposes and business entities and provide various types of of financial services, such as:

a. helping companies and governments raise capital by issuing securities, namely stocks and bonds.
b. Underwriting securities’issues, i.e., by guaranteeing to buy these securities when the market is bearish.

c. Serving as an intermediary between corporations and investors through Initial Public Offerings (IPOs) by providing
underwriting services or new stock issues when a company decides to go public and seeks equity funding.

d. IBs can also sell stocks or shares to institutional investors like insurance companies, investment funds – companies that
invest money of lots of small investors – and pension funds – companies that invest money that will later be paid to retired
workers.

e. IBs usually have a stockbroking department that buys and sells stocks, bonds, etc., for clients. IBs equally have a
dealing department which trades with their own money.

f. IBs, equally, fulfill several advisory functions for their clients. In addition to handling IPOs, company flotation or raising capital,
IBs assist companies in handling mergers and acquisitions as well as divestitures.
 Role & Functions of Ibs (Cont.) :

g. IBs stand in a better position to fulfill these range of functions thanks to their extensive research departments which involve
skilled financial analysts who work out how much things are worth now, and financial forecasters that predict future prospects.

Targeted vocabulary items:

Issue securities : offer them for sale

Bear (N.) market : a period during which people sell, rather than buy, shares because they expect prices to fall. In other words,
a bear market is characterised by low demand. (≠ Bull (N.) market) (Bearish ≠ Bullish (Adjs.)

Go public : the act of a company going from private to public status, thus allowing its shares to be traded, i. e., sold and
purchased on a recognised exchange. Go public (Am. Eng.) Flotation (Brit. Eng.)

Going public involves the change of the business structure from a Sole proprietorship to a Public Limited Company (PLC.)
Sole Proprietorship Vs. Public Limited Company

Sole Proprietorship Public Limited Company (PLC)

A form of business ownership in A business structure in which securites

which only one individual acquires all are traded on the stock exchange. PLCs
the benefits and risks of running an are strictly regulated and are required by
law to publish their complete and true
enterprise and there is no legal
financial position so that investors can
distinction between the assets and
determine the true worth and value of
liabilities of a business and those of
their stocks.
its owner.
 Useful Vocabulary Items/ Structues:

 Have  Have
 Hold  Hold
Investments Investments
 Buy  Buy
 Sell  Sell

Divestiture: (Divest (v.).

The selling, or otherwise disposal of, a less or unprofitable firm’s asstes to achieve a desired goal such as greater
Liquidity or reduced debt burden.
 Expressing Purpose
Purpose ≈ Aim, Objective, Goal, Target, etc.

 In order to Infinitve

 So as to + e. g.
The CEO met the staff in order to expalin company’s plans for the coming
fiscal year.
 To
Positive goal

 In order not to Infinitve

 So as not to + e. g.
The CEO had a meeting with the labour union so as not to disrupt the
process of production
 Not to
Negative goal

 So that + Subject + Modal auxiliary + Infinitive:

e. g. The CEO had a meeting with the labour union so that he would intelligently negotiate a
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