Last week the FTSE 100 Index rose by just over 300 points to recover the 4500 mark. The index was still down by 31% over 2008, but it did perk up slightly in the absence of any further bad news, and was also supported by some New Year buying. Investors have tried to look forward to better times, and there have been some nascent flickerings of general optimism as investors consigned 2008 to the past. Several series of ‘out-of-the-money’ call warrants on the FTSE 100 Index have gained strongly over the week, including the speculative SW13 FTSE 100 6000 19-Jun-09 calls, up by 84%, and the SH65 FTSE 100 5200 18-Sep-09 calls, up by 42%.
Amongst the prime movers, commodity stocks stand out. These have rallied as bombed-out shares such as Anglo American and Xstrata appear on the lists of tips for the year as pundits anticipate a recovery in demand later in 2009. Anglo American shares have risen by 200p to 1707p, boosting the value of the SH01 Anglo American 1900 19-Jun-09 calls by 55.6%. Similarly, Xstrata shares have jumped from 610p to 736p, resulting in a 50% leap for the now in-the-money SD74 Xstrata 700 20-Mar-09 call warrants.
If economies do start to recover, the oil price is perhaps an obvious way to participate. We note, for example, that Barclays Capital is standing by its forecast of US$76 a barrel for average US crude in 2009, saying improving demand and a supply slide will combine to buy oil prices. "Consensus is way, way, way wrong in terms of supply, demand and price," analyst Paul Horsnell said in the latest review of weekly oil data. He added “we'll stick to our US$76 per barrel for the moment on the basis that demand will look better over time than is embedded in current perceptions, and that supply-side dynamics will look dramatically worse.”
In the short-term, oil has rallied to around US$48 per barrel after more violence in Gaza. Investors have been buying BP. It shares added 54p over the week to reach 550p, and the SW19 BP 700 19-Jun-09 calls have risen by 47% in response. BP shares have been on a rising trend since September, and have been tracing out some interesting chart patterns – traders might find it useful to take a look.
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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.
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| Global Equity Benchmarks |
| Index |
YTD perf |
Weekly perf |
Close |
| FTSE 100 |
2.88% |
8.19% |
4561.79 |
| FTSE 250 |
4.19% |
4.93% |
6627.17 |
| DJ EUROSTOXX 50 |
3.03% |
6.03% |
2525.73 |
| DOW JONES IA |
1.69% |
4.80% |
8924.38 |
| NIKKEI 225 |
0.00% |
1.37% |
8859.56 |
| NASDAQ |
2.13% |
4.39% |
1237.44 |
| Currency Benchmarks |
| Benchmark |
YTD perf |
Weekly perf |
Close* |
| GBP/USD |
-0.70% |
-1.62% |
1.4512 |
| GBP/EUR |
-0.43% |
0.13% |
1.0407 |
| EUR/USD |
-0.66% |
-0.95% |
1.3932 |
| USD/JPY |
0.29% |
0.77% |
91.16 |
*Mid Price.
Source: Bloomberg as at 02/01/2009
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| Commodities |
| Benchmark |
YTD perf |
Weekly perf |
Close* |
| Gold |
-1.33% |
2.99% |
869.73 |
| Silver |
-2.55% |
7.14% |
11.1 |
| Oil |
3.39% |
22.28% |
46.11 |
| Volatility Benchmarks |
| Benchmark |
YTD perf |
Weekly perf |
Close |
| VIX |
-5.60% |
-12.96% |
37.76 |
| VDAX |
-7.17% |
-4.80% |
35.09 |
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HOT Listed Structured Products
On 3rd December 2008, SG issued two new Listed Structured Products:
SG77 UK and US Equity Income Certificate:
A 5-year GBP investment linked to the FTSE 100 and S&P 500, offering an annual coupon of 10.5% p.a. with capital protected if neither Index falls by 50%.
>> Click here to find out more
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SG78 FTSE 100 Double Upside Accelerator:
A 1-year GBP investment offering 2x the rise of the FTSE 100 Index upto a capped return of 30% with capital protected if the Index does not fall by 40%.
>> Click here to find out more |
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Latest news
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In November 2008 Société Générale was granted two awards for its achievements in the Listed Products industry.
Financial Times’ Investors Chronicle rewarded SG with the “Best Innovation of the Year Award” for one of its Listed Structured Products the SG67 Global Index Bear accelerator which allows investors to leverage on a bearish view on the Uk market. That same evening Lyxor ETF received the silver award as best ETF provider. Investors Chronicle has been providing private investors with weekly market analysis since 1860.
For the fifth consecutive year Socété Générale was voted “Best Covered Warrants Provider” by Shares Magazine, the professional stock market weekly magazine.
These awards echo the innovation and hard work that Société Générale Corporate & Investment Bank upholds in difficult times towards its clients and products. |
Shares Awards 2008
"Best Covered Warrants Provider" |
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FT Investors Chronicle
"Innovation of the Year" |
Latest Special Warrant and Turbos Reports
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Bringing you another Master Class - Covered Warrants by Investors Chronicle magazine.
Introducing Covered Warrants: explaining how they are priced and how to use both call & put covered warrants in falling or rising markets.
Please click here to read more
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Also presenting a special report on Turbos by Investors Chronicle magazine.
Introducing Turbos, comparing them to other derivative products and explaing how to use them to shelter your assets.
Click here to read more
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Top moving warrants for week of 26/12/08 - 02/01/09
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| Code |
Underlying |
Spot (GBp) |
Warrant Price* (GBp) |
Warrant Price Move^ |
Type |
Strike |
Expiry |
| UP Movers |
| SA66 |
FTSE 100 |
4561.79 |
0.39 |
+225.00% |
Call |
6300 |
20/03/09 |
| SA80 |
FTSE 100 |
4561.79 |
.081 |
+189.29% |
Call |
6100 |
20/03/09 |
| SW12 |
FTSE 100 |
4561.79 |
1.48 |
+184.62% |
Call |
5900 |
20/03/09 |
| SH88 |
DAX |
4561.79 |
18.85 |
+169.29% |
Call |
6000 |
19/06/09 |
| SW31 |
Anglo American |
1712 |
1.27 |
+164.58% |
Call |
3800 |
20/03/09 |
| DOWN Movers |
| ST99 |
Sugar |
0.12 |
14.30 |
-55.52% |
Put |
0.1 |
17/02/09 |
| SC24 |
FTSE 100 |
4561.79 |
10.30 |
-40.80% |
Put |
3600 |
20/03/09 |
| SC23 |
FTSE 100 |
4561.79 |
13.70 |
-40.17% |
Put |
3800 |
20/03/09 |
| SC22 |
FTSE 100 |
4561.79 |
19.00 |
-37.91% |
Put |
4000 |
20/03/09 |
| SC21 |
FTSE 100 |
4539.91 |
24.40 |
-36.29% |
Put |
4200 |
20/03/09 |
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Listed Structured Products Update
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| Name |
Code |
Description |
Monthly Perf^ |
Week on
week Perf^ |
| Accelerators |
| Global Index Bear Accelerator |
SG67 |
10x positive participation in any fall of up to 22% in one of the four main global indices: FTSE100, S&P500, DJ Eurostoxx50 and Nikkei225 |
-5.34% |
5.89% |
Global Index
Bear
Accelerator 3 |
SN03 |
6.5x positive participation in any fall between -2.5% and -30% in one of the three main global indices: FTSE100, S&P500, DJ Eurostoxx 50, over 3 years, with only 1x negative participation in any rise in these indices. |
-2.32% |
-4.14% |
Global Index
Bear
Accelerator |
SN01 |
8x positive participation in any fall between -2.5% and -30% in one of the three main global indices: FTSE100, S&P500, DJ Eurostoxx 50, over 3 years, with only 1x negative participation in any rise in these indices. |
-2.49% |
-4.51% |
| Income Products |
| UK Bank Stocks Reverse Convertible |
SG68 |
19% guaranteed coupon at maturity. Capital is protected as long as one of the three UK bank stocks does not fall by 40% or more |
-13.43% |
7.72% |
| Capital Guaranteed Products |
| Private Equity Index |
SN02 |
100% Upside participation, 100% capital protection at maturity, March 2013 |
-1.17% |
-0.82% |
Source: SG as at 02/01/2009 ^Offer to Bid
>> Selftrade website - Structured products section |
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Lyxor ETF Update
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Lyxor Exchange Traded Funds (ETFs) are passively managed index tracking funds listed on the London Stock Exchange.
>> Click here to download the educational brochure
*Mid Price
Source: Bloomberg as at 02/01/09
In accordance with the Rules of the Financial Services Authority it is not possible to show the past performance of Lyxor ETF's which are less than 12 months since their launch. Past Performance is not a reliable indication of future performance.
>> Selftrade website - ETFs section
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Disclaimer
Warrants are not suitable for everyone. You should not deal in warrants unless you understand their nature and the extent of your exposure to risk. You should be satisfied that they are suitable for you in the light of your circumstances and financial position. This disclaimer cannot disclose all the risks and other significant aspects of warrants. If you are in any doubt you should consult an appropriately qualified financial advisor.
Lyxor ETFs are open-ended mutual investment funds established under French Law and approved by the Autorite des Marches Financiers. The funds are UCIT III compliant however only those funds recognised under S.264 of the Financial Services and Markets Act 2000 may be promoted to retail investors in the UK.
A list of recognised funds with prospectus is maintained on www.lyxoretf.co.uk. Any investment in Lyxor ETFs carries with it certain risks set out in the Prospectus. Lyxor ETFs are not suitable for all investors, it is recommended that potential investors study the Prospectus and seek their own independent financial advice before making any decision to invest in Lyxor ETFs. SG Option Europe may be the only market maker.
Investors' capital is at risk.
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