Oil has been the major story in global asset markets this week.  The price has shot higher on speculative demand from investors and on supply concerns following more unrest in .  From a little over US$60 per barrel a year ago, the price has more than doubled to touch US$126 per barrel, having only broken through the US$100 mark at the start of the year.  Some analysts have even been quoted as saying the price could hit US$200 per barrel this year.  Investment bank Goldman Sachs said the possibility of US$150-US$200 a barrel over the next six months to two years was "increasingly likely."  Not surprisingly, call warrants on oil have been in the black and have returned some dramatic gains – the ST37 Brent 07/2008 120 Jun 08 calls are up by 142% over the week.

Another commodity to hit new highs is platinum, which has gained on news of a new ETF-type investment product in the which could increase investment demand from institutions.  The price of platinum has risen to US$2058 per ounce, driving the value of the SP36 Platinum 1800 Jun 08 calls up by 73% over the week, to 162.5p.

On the corporate front, the directories business Yell Group stands out.  Its shares have risen from 166p at the end of April to 196.5p just over a week later.  Buyers have reacted to good results from the company Idearc, which operates some similar business lines.  Yell’s own full-year results are due to be announced on May 20^th.  The ST32 Yell Group 400 Dec 08 call warrants have risen by 82% on the week.

Andrew McHattie

Andrew McHattie MA (Cantab) founded The McHattie Group investment publishing business. He has been the publisher and editor of the UK’s leading warrants newsletter “Warrants Alert” since its inception in 1989. He also edits a range of other warrant publications and services including “Warrants Alert Professional” and “The Warrants Directory Online.” He is chairman of McHattie Investment Management, and the manager of the McHattie Warrants Alert Fund unit trust.
The above text expresses the views of the author and not SG. The McHattie Group is regulated by the Financial Services Authority.



This week sees trading updates on International Power (888p) and Diageo (1043p). Depending on whether you are bullish or bearish, SG offers a full range of highly leveraged warrants allowing investors to speculate and/or hedge.

International Power (425p)
400p Dec 08 Call (SV31) 3.4x leverage, currently 80.9p
400p Jun 08 Put (SQ18) 7.7x leverage, currently 20.0p

Diageo (1043p)
1000p Jun 08 Call (SR04) 7.6x leverage, currently 9.05p
975p Jun 08 Put (SK26) 12.9x leverage, currently 2.21p