Press releases 2003

12 November 2003

London's Covered Warrant Market grows 15 per cent per month in the first year

• 15 per cent monthly average growth in first year
• £97 million traded in first year
• 823 covered warrants issued

London’s covered warrant market achieved an average growth of 15 per cent per month in its first year of trading, the London Stock Exchange revealed today. 

Since launch in October 2002, over £97 million has been traded on the 823 covered warrants issued on underlying assets such as: UK equities and indices; property; currency; and commodities including oil, gold and silver.

FTSE 100 warrants were the most popular covered warrants with investors – four of the top ten most traded warrants by value, were based on the FTSE 100. 

The most popular equity warrant (by value) was the SG Astrazeneca call warrant (strike price 2500 pence), whilst the most popular commodity warrant was the Goldman Sachs Gold call warrant (strike price USD 425).

In addition, the Exchange's monthly market report, published earlier this week, showed that October 2003 was the strongest month for covered warrant trading since the market was launched – 3,705 trades worth £21.7 million were traded. 
 
The Exchange, along with the covered warrant issuers – Goldman Sachs, JPMorgan, SG and TradingLab – anticipates growth will continue in the market's second year.

Martin Graham, the Exchange's Director of Market Services, said:

"We were pleased with first year performance as the UK is one of the few markets to have actually grown directly after launch.  Investors and brokers are becoming more familiar with the advantages offered by covered warrants and are increasingly incorporating them into their portfolios."  

Private client brokers also benefited from the market’s growth. Neil Jamieson, Head of Marketing at comdirect, said:

"Our early investment in the marketing of covered warrants to new and existing customers has paid off - they are now the second most traded product at comdirect."  

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For further information, please contact:

Tiffany Hardie-Evans  Press Office  +44 (0)20 7797 1222
or 
newsroom@londonstockexchange.com