Monday, May 12, 2003

Goldman Sachs offers derivatives/property punt
'The investment bank is to launch a range of covered warrants and certificates that will allow investors to bet either that house prices will rise or fall. The warrants will be linked to the Halifax House Price Index that issues statistics on UK house prices every month and on London property values every quarter... "This is the first time that anyone has launched warrants and certificates on a house price index. "You can make spread bets on house price indices but they are not listed securities on the stock exchange and they are derivatives so you can lose more than your original investment. "We think interest will come from private clients and institutional and property investors. You do not have to pay stamp duty, legal fees or for searches but you still get exposure to the property market."'

The implications of a dramatic bust in land values need to be considered...

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